Quiet Chinese game disrupts iPhone production in India

Highlights

Foxconn recalls over 300 Chinese engineers from Indian facilities

Apple's iPhone production in India faces disruption as Foxconn experiences a significant withdrawal of Chinese engineers from its Indian facilities, impacting the ramp-up for iPhone 17 manufacturing. This exodus, influenced by China's efforts to restrict technology transfer and skilled labour exports, threatens Apple's ambitious goals to shift iPhone production to India amidst rising geopolitical tensions and supply chain diversification efforts.

Apple's largest iPhone manufacturer has recently recalled over 300 Chinese engineers and technicians from its Indian production facilities. The mass withdrawal, which began two months ago, leaves only Taiwanese support staff at Foxconn's southern India plants.

The exodus comes as a major disruption to Apple's India expansion strategy, particularly as Foxconn constructs a new iPhone assembly facility in the region. While product quality may remain unaffected, assembly line efficiency could suffer during the critical ramp-up period for next-generation iPhone production. Beijing officials have quietly pressured regulatory agencies and local governments to restrict technology transfers and skilled labour exports to India and Southeast Asia, Bloomberg reported. This coordinated effort aims to prevent Chinese companies from relocating manufacturing capabilities to competing nations amid escalating US-China trade tensions.

The strategy extends beyond personnel, encompassing specialized equipment and technical know-how essential for high-tech manufacturing. China's actions come as countries like India and Vietnam aggressively court global technology companies seeking to diversify their supply chains away from Chinese dependence.

Apple CEO Tim Cook has consistently emphasized the irreplaceable expertise of Chinese assembly workers, describing their skills as fundamental to maintaining production standards beyond mere cost considerations.

India currently produces one-fifth of global iPhone output, a remarkable achievement considering large-scale assembly began just four years ago. Apple had targeted manufacturing most US-bound iPhones in India by late 2026, a timeline now facing potential delays due to the technical expertise shortage.

The development highlights the complex challenges facing multinational corporations navigating geopolitical rivalries while attempting supply chain diversification.