Inside China's quiet move to disrupt iPhone production in India

India Today

11 hours ago

At a time when Apple was preparing to ramp up production of its next flagship iPhone in India, hundreds of Chinese engineers and technicians working at its main supplier, Foxconn's factories, have been told to pack up and leave.Over 300 skilled workers have exited Foxconn's iPhone plants in southern India, reported Bloomberg. While Foxconn and Apple haven't officially commented, the timing and silence speaks volumes.The development is more than just a routine reshuffle of manpower. It comes amid growing tension between Beijing and Western tech firms shifting manufacturing away from China and the border dispute between India-China.For Apple, which has invested heavily in expanding its manufacturing footprint in India, the loss of trained Chinese technical staff is a setback. These engineers were not only involved in assembling devices but also in training India's workforce and transferring decades of process knowledge built inside Chinese mega-factories.SLOW UNRAVELLING OF CHINA'S GRIPChina's clampdown on the outflow of talent, technology, and equipment has grown sharper in recent months. According to Bloomberg, the Chinese government has informally urged companies and regulators to stop exporting key equipment and restrict movement of skilled labour to destinations like India and Southeast Asia.The intention seems clear: slow the pace of the 'China plus one' strategy being adopted by multinationals hedging against geopolitical risk.Over the past year, China has restricted exports of rare earth magnets used in electric vehicles, tightened control over APIs for the global pharma supply chain, and now, through its grip on Foxconn, has begun holding back skilled mobile manufacturing talent. It's no longer just trade friction. It's supply chain resistance.FOXCONN IN INDIAFoxconn, which still produces the bulk of iPhones in China, has gradually built large-scale assembly lines in India over the past four years. In 2024, Apple hit a milestone: more than $10 billion worth of iPhones were assembled in India, of which about $7 billion were exported, mostly to the US. India now accounts for nearly 20% of Apple's global iPhone output.The latest model, the iPhone 17, was to be a huge step in Apple's plans to make India its second home for high-end production. That roadmap now looks uncertain. While Bloomberg reports that quality won't be affected by the Chinese withdrawal, efficiency and training are expected to suffer.Foxconn's Chinese engineers played a critical role in setting up India's assembly lines, bringing with them years of expertise from Shenzhen's highly optimised factories.Without them, India's new recruits will have to climb the learning curve without real-time mentoring. And that's not easy when producing devices that require over a thousand individual components to be assembled with microscopic precision.WHY THIS MATTERS MORE THAN AN APP BANIndia's own economic retaliation against China after the 2020 Galwan Valley border clash was largely symbolic, banning apps like TikTok and curbing Chinese investments in sectors like telecom and power.Yet, despite public sentiment, China remained India's largest import partner, with over $101 billion in imports in FY24, according to India's commerce ministry.China's current playbook is different. By quietly extracting engineers and making the movement of skilled labour more difficult, it's targeting the very foundation of India's electronics ambitions. Unlike app bans or visa curbs, this affects factory floor efficiency, knowledge transfer, and long-term manufacturing capabilities.According to Bloomberg, Indian authorities were informed of the withdrawal but weren't told why. There has been no formal disruption in iPhone production yet, but officials are monitoring the situation closely.SHIFTING GEARS IN A FRAGILE WORLD ORDERApple's India expansion is a direct result of US-China trade tensions that began under former President Donald Trump. Those tensions have now matured into strategic moves from both sides, America offering tax breaks and trade deals to countries like India and Vietnam, and China responding with restrictions on tech, talent and raw materials.China's latest act may not appear as dramatic as a tariff war, but it could prove just as disruptive. For Apple, which plans to manufacture most iPhones for the US in India by 2026, the risks are rising on both sides.Trump's latest campaign rhetoric has once again targeted Apple, urging it to 'make in America.' But Apple, bound by the high costs of US labour and the lack of large-scale assembly expertise, has so far avoided that path.Now, with China pulling levers from behind the curtain, even Apple's Plan B in India may face rough weather.What we're witnessing is a slow, high-stakes tug of war between a country that once powered global supply chains and another trying to become their new home. For India, the exit of a few hundred engineers may seem small on paper, but the void they leave could cause delays and hiccups in one of its most high-profile economic transformations.Whether Apple can weather the change without disrupting its production targets, or whether China has found an effective brake on the shifting axis of tech manufacturing, will become clear in the months leading up to the iPhone 17 launch.For now, the silence from Apple and Foxconn may speak louder than any official statement.- EndsTune InMust Watch
advertisement