Apple tests Aequs in latest India supply chain push

Karnataka-based diversified contract manufacturer Aequs group has moved to the “trial stage” to be onboarded as an Apple supplier, said people familiar with the development. If the maker of toys, consumer durable goods and aerospace parts passes the trial stage, it is likely to become the second Indian company to make it to the American technology firm's supplier list and the sole domestic firm to make parts for MacBook personal computers and Apple watches, they said.

As of now, Tata Electronics is the only Indian supplier to Apple, and it makes iPhone enclosures. “Aequs has begun trial production of MacBook enclosures as well as mechanical components for the Apple watch,” one of the persons told ET on condition of anonymity. “They have also sent these parts across for a ‘fitment check’ to one of Apple’s designated suppliers in Vietnam.”

ET was the first to report in December last year that Aequs group was among the Indian players that the Cupertino-based firm was in advanced talks with. Experts had said at the time that Aequs had the ability to make low-engineering products such as iPhone cases and other high-quality products that require extremely high precision.


ET’s queries sent to Apple and Aequs remained unanswered till press time.

Experts, however, said that while it was a significant feat for an Indian player, the process to be onboarded as an Apple supplier was a rigorous one.

“While India possibly has a good pipeline of suppliers to enter the Apple supply chain, it is normally a thorough evaluation process and tough to live up to Apple’s customisation and quality standards,” said a person, who did not wish to be identified. “So, even if a supplier enters the Apple supply chain, it will mostly commence with older or less sophisticated components from tooling, machining and finishing expertise.”

For instance, it could mean having Indian suppliers begin with aluminium, rather than the titanium casing that Apple uses in its latest smartwatches, said the person. For suppliers, according to the person, it also means elevating their expertise because Apple generally uses premium components like anodised recycled aluminium for MacBooks rather than plastic or polycarbonate which is used by other original equipment manufacturers.

Industry watchers said electronics manufacturing in India presented a “compelling opportunity” for traditional non-electronic companies to venture into the sector, which in turn would contribute to the scale and robustness of the industry.

On December 5 last year, ET had reported that Apple was scouting for new suppliers — Indian, Japanese, Taiwanese and South Korean — to provide crucial components to its contract manufacturers in India owing to delayed government approvals for imports from existing suppliers, primarily of Chinese-origin, of batteries, camera lens, chargers and other equipment required to make its flagship iPhones and iPads in India.

Backed by the production-linked incentive (PLI) scheme, Apple has been aggressively pushing for manufacturing in India in a bid to diversify its supply chain out of China. It has been scouting for Indian suppliers as it looks to ramp up operations in the country. Some of its largest electronics manufacturing services players are already present in India — Foxconn, Pegatron and Wistron (now taken over by Tata Electronics).

The suppliers too have been expanding rapidly. For instance, Foxconn has been doubling down on its India investments. The Taiwanese contract manufacturer has not only been scaling up its existing facilities but also has been eyeing expansion into newer domains in the country.

Tata Electronics has also been aggressively expanding operations. Besides, other American players such as Corning and Jabil too have announced big-ticket investments to cater to Apple's increasing demand.