Apple’s cable supplier Foxlink is going to set up a factory in Chennai, Bloomberg reports. The Taiwan-headquartered company, whose official name is Cheng Uei Precision Industry Co. Ltd., joins other suppliers like Foxconn Hon Hai, Wistron, and Pegatron. The latter three companies will be receiving production-linked incentives, the Indian government had announced earlier this month. Foxlink seems to have set up an additional India subsidiary this March in Vikruthamala, Andhra Pradesh. “To establish new subsidiary company in India, the initial investment amount is 160 million rupees,” Foxlink said on its website.
Foxlink joins Apple’s ranks of suppliers who are expanding manufacturing to India (and Tamil Nadu in particular) as tech companies face pressure to set up alternate manufacturing bases amid the US–China trade war. It also comes as Apple discontinues giving customers chargers and earphones for new purchases. However, cables, the kind Foxlink will likely be making, will still be provided with new iPhones, and Apple will still have to make as many cables as phones.
How making cables in India makes sense
Moving cable production in India in addition to handset assembly makes sense. In 2017, the government slapped a 10% import duty on charging cables. By making its cables in India, Apple accomplishes two things: one, lower prices on par with third party manufacturers of lightning cables, and two, everything that comes in an iPhone box gets to be “assembled” in India, likely leading to some tariff or taxation relief for the company. We have reached out to Apple for confirmation that Foxlink’s Chennai plant will indeed be making cables for Apple.
Of course, these benefits are not instant — Apple typically delays Indian manufacturing of its handsets; and while these delays have shortened, the latest iPhone is only expected to go into production in India in the middle of 2021, and it is unknown if prices will reduce due to the domestic manufacturing.