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Apple contract manufacturer Foxconn is facing multiple operational challenges in India due to the tactical pressure from China, as iPhone production out of the alternative market gains significant momentum.
The Taiwanese company has multiple iPhone assembly lines in India and further expansion is underway – a $1.5bn investment in a new component factory near Chennai, nearing completion, reflects that push.
According to reports, Beijing is tactically delaying critical input supplies and recalling on-site Chinese engineers working at Foxconn’s Indian production plants in specialised roles to disrupt the production pace.
Some 300 Chinese staff have already been repatriated back home over the last two months, sources said.
Foxconn is known to have flagged the Indian government about potential production woes stemming from that en masse attrition.
Ironically, those manufacturing snags come on the heels of US president Donald Trump opposing Apple’s ongoing investment push in India and threatening a 25% additional tariff on Indian-made iPhones shipped to the US.
Foxconn exported some $3.2bn worth of iPhones out of Indian factories from March to May this year, with the lion’s share shipped to the US.
By value, Indian iPhone exports out of Foxconn production to the US in the first five months alone soared to some $4.4bn, from $3.7bn for the whole of 2024, according to available data.
Electronics manufacturing in India has seen rapid growth in recent years, as global giants increasingly diversify their supply chains in Asia.
But relocated sites continue to rely heavily on Chinese supplies for a lot of components needed for the production.
India now accounts for approximately 20% of Apple’s global iPhone production, industry estimates show. And the hi-tech giant wants to make the bulk of iPhones meant for the US market in India by 2026.
That strategic supply chain clampdown used by China to thwart trade diversification has been long-simmering, according to Indian government sources.
Earlier this year, hi-tech component supply lines from China to India had halted following a series of export controls imposed by Beijing amid trade tariff skirmishes and renegotiations with the US.
Apart from electronics verticals, India’s rapidly growing EV industry relies heavily on Chinese-made components like lithium-ion batteries and semiconductors.
India’s recent border tensions with China, following the June 2020 faceoff, had also added to the chronic crisis, with New Delhi tightening regulatory policies regarding Chinese investments and personnel (visa restrictions). But the deeply strained bilateral ties saw some sort of a thaw late last year following rounds of diplomatic talks.
Given the volatile global trade order, local industry pundits believe New Delhi needs to do a complex balancing act – fixing the supply chain bottlenecks that threaten its manufacturing ambitions in the near term, and creating alternative sourcing channels outside of China as well as through localised development options, for its longer-term aspirations.
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