 "Foxconn logo is seen in this illustration taken, May 2, 2023. File Photo/Reuters")
Apple’s move to increase its iPhone production in India has hit a roadblock. Foxconn Technology Group has reportedly called back hundreds of Chinese engineers and technicians from its iPhone factories in India.
The decision could impact Apple’s manufacturing plans for the iPhone 17, which is expected to be unveiled in mid-September. But why has Foxconn pulled back its staff from India?
We will explain.
Foxconn asks staff to leave India
Foxconn has pulled more than 300 of its Chinese staff from iPhone plants in India, as per a Bloomberg report. Now, mostly support staff from Taiwan remain in the South Asian country.
The order was issued two months ago, the report said, citing people familiar with the matter. The Indian government was apprised of the move but was not given any reasons.
The company is replacing the Chinese staff with Taiwanese and Vietnamese workers.
Foxconn, Apple’s biggest assembly partner, has also asked its suppliers to transform some machinery that runs on Chinese-language software so that it can be used by Indian engineers and other workers who know English.
Foxconn will get the delivery of these machines in a few months, according to the Bloomberg report.
How Foxconn’s move affects Apple
Foxconn’s decision could impact the production of the new iPhone 17, the production of which Apple plans to enhance in India. However, no major impact has been witnessed yet, as per the Bloomberg report.
Foxconn continues to make most iPhones in China. However, it has erected sizable assembly lines in India, mostly in the south, in recent years. The company had sent many experienced Chinese engineers to India to accelerate its expansion.
Foxconn’s new assembly plants, including the one in Bengaluru, are in the pipeline. The company was preparing to hire 1,000 more local employees in India by mid-July, adding to its current tally of around 40,000, a South India-based industry source told Business Standard.
India has downplayed the development, saying an impact on the iPhone production is only short-term.
“We don’t see any problem. Their (Foxconn’s) technicians come from China, Taiwan and the US regularly to India. We have enough manpower in the country. Also, many companies have also started manufacturing machines locally. At most, what we see is a temporary disruption for a month or so,” a senior Ministry of Electronics and Information Technology (MeitY) official told Business Standard.
Apple plans to build most iPhones for America in India by late 2026, a move that has brought the company into the line of fire of the US President Donald Trump .
Union Commerce & Industry Minister Piyush Goyal had said in 2023 that Apple is aiming to manufacture 25 per cent of all of its iPhones in India.
Apple CEO Tim Cook has said the company is importing more iPhones from India, rather than China, amid US’ tariff threats.
Foxconn’s move comes as Apple has diversified its supply chain beyond China to countries like India and Vietnam.
The removal of Chinese workers from India would delay the training of the local workforce and the transfer of manufacturing technology from China. This could increase the production costs of the iPhone, people familiar with the matter told Bloomberg.
Foxconn’s order is unlikely to impact the quality of production in India, but could affect efficiency on the assembly line, they added.
Was China behind Foxconn’s move?
Foxconn’s decision to pull Chinese staff from India comes after officials in Beijing verbally encouraged regulatory agencies and local governments to restrict technology transfers and equipment exports to India and Southeast Asia earlier this year, reported Bloomberg.
This was done to stop companies from moving manufacturing to other places.
Chinese managers have also criticised the training of Foxconn staff in India. Beijing has made it harder for the shift of technology, skilled labour and specialised equipment from China to India.
Top intelligence sources have told CNN-News18 that this is part of China’s plan to thwart India’s goal to become a global manufacturing hub. This could also impact India’s reputation as a reliable global supply chain partner.
With inputs from agencies