efforts to diversify manufacturing in India face

stumbling blocks, reports FT

ing iPhones, according to a person familiar with the matter. This 50 per cent “yield” fares badly compared with Apple’s goal for zero defects.

The report highlights that operations in India are not running at the pace seen in China, where suppliers and government officials took a “whatever it takes” approach to win iPhone orders. Apple engineers have also been housed at city-centre hotels in Chennai, two hours away from the factories where they are working, requiring four hours of daily commuting, with occasionally poor Wi-Fi connections along the route.

India’s tax officers search BBC offices in Delhi and Mumbai

Adani hires Grant Thornton for some independent audits after Hindenburg fallout -sources

Profit Report

India’s Adani Group has appointed accountancy firm Grant Thornton for independent audits of some of its companies in a bid to discredit claims by short-seller Hindenburg Research that have battered its stocks and bonds, two people familiar with the matter said on Monday.

Profit Report

Apple’s efforts to reduce its reliance on China by increasing production in India have hit a roadblock, according to a report published in the Financial Times. The report highlights the challenges faced by the tech giant in its efforts to establish its supply chain in the country. Apple has been sending engineers and product designers from California and China to factories in southern India to train locals and help establish production. This is in line with the company’s efforts to diversify its supply chain strategy, following months of Covid-19 disruption that led to a decline in quarterly revenues.

While Apple has been producing lower-end iPhones in India since 2017, last September was significant, with Indian suppliers building flagship models within weeks of their launch in China. However, its experience in recent months has demonstrated the scale of the work to be done in the country. The report states that at a casings factory in Hosur run by Indian conglomerate Tata, just about one out of every two components coming off the production line is in good enough shape to eventually be sent to Foxconn, Apple’s assembly partner for build-

Despite these challenges, analysts say India’s potential for Apple is huge. The report quotes a consultant at Bain, who estimates that manufacturing exports from India could more than double from $418bn in 2022 to more than $1tn in 2028, driven by policy support and low costs. It estimates that electronics exports alone will grow at an annual rate of up to 40 per cent.

Vivek Wadhwa, a Silicon Valley-based entrepreneur and academic who last month met with government officials, including Prime Minister Narendra Modi, said the central government is encouraging businesses to take advantage of Apple’s need to diversify from China.

Recent job ads from Apple make clear it has major ambitions in the country. One ad tells prospective employees they will “grow nascent operations in India to service all product lines of business at Apple while simultaneously building the factory of the future”. “India” was also mentioned 15 times in Apple’s earnings call earlier this month, with CEO Tim Cook calling the market “hugely exciting” and “a major focus” and confirming plans to open the first Apple Stores in the country soon.

According to the FT report, Apple declined to comment.

Indian tax officers searched the BBC’s bureaus in New Delhi and Mumbai on Tuesday, the British broadcaster said, weeks after the government came down hard against a BBC documentary critical of Prime Minister Narendra Modi’s role in the 2002 Gujarat riots.

The documentary had focused on the Hindu nationalist politician’s leadership as chief minister of the western state during the deadly communal riots, in which at least 1,000 people were killed, most of them Muslims, though activists put the toll at over twice that number.

“The Income Tax Authorities are currently at the BBC offices in New Delhi and Mumbai and we are fully cooperating. We hope to have this situation resolved as soon as possible,” the BBC said in a statement.

The tax department did not respond immediately to emails seeking comment.

One of two sources in the BBC’s New Delhi of- fice told Reuters that tax officials were speaking with the accounts officer and no one was allowed to leave.

While the search was underway, television news crews set up outside the office near Connaught Place, in central Delhi, to report developments.

The main opposition Congress party condemned the tax department’s actions.

“The IT raid at BBC’s offices reeks of desperation and shows that the Modi government is scared of criticism,” lawmaker and Congress General Secretary K.C. Venugopal wrote on Twitter. “We condemn these intimidation tactics in the harshest terms. This undemocratic and dictatorial attitude cannot go on any longer.”

Modi’s Bharatiya Janata Party (BJP) said Indian institutions work independently and the tax department was “within law in looking into tax compliance”.

“India is a vibrant democracy where no one is above the law,” Gopal Kr- ishna Agarwal, a BJP spokesman, said.

Last month, police in Delhi detained students as they gathered to watch the documentary that the government has dismissed as propaganda. India’s foreign ministry in January said the documentary was meant to push a “discredited narrative”, was biased, lacked objectivity and showed a “continuing colonial mindset”. The BBC has stood by its reporting for the documentary.

Modi ruled Gujarat for more than a decade before becoming prime minister in 2014. Accusations he did not do enough to stop the rioting have dogged his career. Modi has always denied any wrongdoing. In 2013, a panel appointed by the Supreme Court said there was insufficient evidence to prosecute him.

A suspected Muslim mob set fire to a train carrying Hindu pilgrims in Gujarat in February 2002, setting off one of independent India’s worst outbreaks of communal violence.

The appointment marks the first major effort by Adani Group to defend itself in the wake of a Jan. 24 report by Hindenburg that accused it of improper use of offshore tax havens and stock manipulation. The conglomerate, led by billionaire Gautam Adani, has strongly denied the allegations but investors remain concerned. Shares in the group’s seven listed subsidiaries have cumulatively lost about $120 billion in market value in the last three weeks.

Adani Group said last week it was considering independent evaluation of issues relating to legal compliance, related party transactions and internal controls following the Hindenburg report. The appointment of Grant Thornton is reported here for the first time. Grant Thornton has been hired to conduct independent audits of some Adani Group companies, said the sources, declining to be named as the appointment is confidential. One of the sources added that Grant Thornton would look at whether related-party transactions at the Adani Group complied with corporate governance standards. Grant Thornton and Adani Group did not immediately respond to a request for comment. Adani Group sought to reassure investors on Monday, saying it had strong cashflows, its business plans were fully funded and that it was “confident in the continued ability of our portfolio to deliver superior returns to shareholders.” But regulatory pressure has been increasing. India’s market regulator confirmed on Monday it was investigating the report by Hindenburg, as well as market activity immediately before and after the report was published. The U.S. short-seller’s report said it had identified numerous “undisclosed related party transactions” by both listed and private Adani companies, alleging it was in violation of Indian disclosure laws. In its rebuttal, Adani had said “all related party transactions are at arm’s length, properly disclosed and reviewed/audited by statutory independent auditors.”