In a major push for Make In India, Apple plans to eventually move its production units out of China and start producing in countries like India. According to the Wall Street Journal, Apple has instructed the manufacturers that it outsources to, that the tech giant wants to move out of China, citing Beijing’s strong anti-coronavirus stance, among several other factors.
The report also stated that the countries like India and Vietnam, where a minor portion of Apple’s global production comes from, are likely to emerge as the top choice as nations that the manufacturing corporations are considering as alternatives to China.
According to estimates, independent contractors manufacture more than 90% of Apple products such as iPhones, iPads, and MacBook computers in China. Beijing’s Communist regime and the conflicts that it has had with the US government are some other reasons why Apple wants to move its production facilities outside the country.
According to those familiar with Apple’s manufacturing plans, the company sees India as the next China because of its big population and low costs.
With the exception of India, China has the largest pool of qualified workers when compared to other Asian countries. Apple has worked closely with the local government in China to guarantee that its manufacturing contractors have enough land, personnel, and supplies to assemble iPhones and other devices in their massive plants.
Apple CEO Tim Cook said in April, “Our supply chain is truly global, and so the products are made everywhere.” He also said, “We continue to look at optimising.”
Before COVID-19 spread over the world in early 2020, Apple was already trying to take its production units away from China, but the pandemic hindered all plans to do so. According to people familiar with the negotiations, Apple is pressing again and directing contractors where they should search for new manufacturing capacity and is heavily prioritising India and Vietnam.
Because of China’s travel restrictions, Apple was only able to send a handful of executives and engineers to the country to take stock of their contractors’ production facilities. The limited number of engineers and executives meant that Apple couldn’t assess these facilities as thoroughly as they would have liked to.
Furthermore, severe power outages in several parts of China’s prominent industrial estates, and the anti-covid policies in Shanghai which have caused supply-chain issues, have tarnished China’s reputation for dependability as well.