Foxconn asks Chinese staff to fly back home from India — What's the reason? What will be the repercussions? Explained
The move comes amid a blow to Apple Inc.'s manufacturing push in India.
As per a report by Bloomberg quoting people in the know, the bulk of Chinese staff in Foxconn's iPhone plants in south India have been told to fly back home in a move that begun two months ago.
One of the sources revealed that 300 Chinese workers have already left India as part of the move. Now, support staff from mostly remain in the country.
The Bloomberg report said that it was not clear why China-based Foxconn, Apple's biggest iPhone assembler, is sending workers back home.
However, the move comes months after officials in Beijing verbally encouraged regulatory agencies and local governments to limit technology transfers and export of equipment to India and Southeast Asia in what seemed to be an effort to prevent companies from shifting their manufacturing units to other countries.
The decision comes at a disadvantageous time for Apple, which is preparing to ramp up production of its soon-to-be-launched iPhone 17 with its manufacturing partners in India.
Foxconn is at the moment building another manufacturing plant in India.
However, the company's move comes after Beijing's push to make it more difficult for technology, skilled labour and specialised equipment to go out of China and shift to manufacturing upstarts such as India, Vietnam and others — countries that are taking advantage of the US-China tensions that have prompted companies to shift manufacturing locations.
Apple Chief Executive Officer Tim Cook has lauded the skill and expertise of Chinese assembly workers, calling it the key reason for setting up manufacturing units of the country.
Their removal of India could potentially mark a shift in the process of iPhone making as it will slow down the training of local workers, Bloomberg reported quoting its sources. The transfer of manufacturing technology may also be affected due to the move, which may then raise production costs.
According to one of the sources, while the move will not impact the quality of production in India, it is likely to affect efficiency on the assembly line.
Chinese managers have been critical in training Foxconn staff in India. The South Asian nation began assembling iPhones at scale just four years ago, and now accounts for a fifth of the global output.
(With inputs from Bloomberg)
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