By Martin Shwenk Leade
PTIRepresentative image.
Foxconn, Apple鈥檚 largest contract manufacturer, has withdrawn more than 300 Chinese engineers and technicians from its Indian iPhone production facilities over the past two months, raising concerns over the stability of Apple鈥檚 supply chain in India just months ahead of the iPhone 17 manufacturing ramp-up.The unexpected recall, reported by Bloomberg, comes amid growing geopolitical friction between China and the United States, with Apple caught in the crossfire.The development comes at a time when India now accounts for nearly 20% of global iPhone production. Foxconn recently invested $2.56 billion in its Devanahalli plant near Bengaluru and has plans to manufacture 100,000 iPhones by December. In March-May alone, Foxconn exported iPhones worth $3.2 billion from India, with 97% of them shipped to the United States.Why is Foxconn sending its Chinese employees back home?While no official reason has been cited for the pullout, sources told The Times of India (TOI) that the Chinese government had instructed some of its nationals to exit India amid worsening trade relations and mounting visa restrictions on Chinese executives.Also Read: The curious case of iPhones- Why a small gadget in your pocket is making the US and China uneasy about IndiaLive EventsBeyond the workforce issue, there are reports that China is delaying the shipment of critical manufacturing machinery to India and has also placed restrictions on the export of rare-earth magnets used in electronics and automobiles. Industry sources said these actions appear to be part of a broader tit-for-tat response to India鈥檚 tightening visa norms for Chinese nationals and increasing scrutiny of Chinese firms.鈥淭here is massive pressure at the operations of Foxconn in India,鈥 TOI quoted one source as saying. Similar concerns are also growing within Chinese smartphone makers such as Oppo and Vivo, which operate large facilities in India, the source said.Why are the Chinese staff crucial?While Chinese personnel make up less than 1% of Foxconn鈥檚 workforce in India, they occupy crucial technical and operational roles. These include managing production lines, ensuring quality control, and overseeing factory automation.Also Read: The dragon is tightening its hold: Can India defy it?鈥淲ith the Chinese government asking its citizens to pull out, it may create disturbance in the production schedule of iPhones,鈥 a source told TOI. 鈥淭heir numbers may be small, but they are vital for day-to-day operations, especially during the critical phases of product ramp-up and quality assurance.鈥滱pple鈥檚 India bet faces new hurdlesThe timing of the pullout is significant. Apple is counting on India to become its next major global manufacturing base, aiming to produce the majority of its US-bound iPhones in India by late 2026. The sudden exit of key personnel could delay these plans.Indian government officials are reportedly aware of the issue and are monitoring developments closely. A detailed report is expected to be sent to relevant ministries, particularly in light of past attempts by China to block the export of factory equipment to India once it learns that a production line is being shifted out of China.(With inputs from TOI)(You can now subscribe to our Economic Times WhatsApp channel)
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(You can now subscribe to our Economic Times WhatsApp channel)Read More News onFoxconnApple supply chainiPhone production in IndiaChinese engineers recallIndia’s manufacturing base for AppleiPhone 17 manufacturingFoxconn investment IndiaApplevocational role of Chinese staff in Foxconn(Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online….moreless