This article was originally published in Rest of World, which covers technology’s impact outside the West.
Foxconn is halting new work rotations for its Chinese employees at its Apple iPhone factories in India, and sending Taiwanese workers instead, according to five people familiar with Foxconn’s operations in India. Shipments of specialised manufacturing equipment meant for India have also been held up in China, the sources told Rest of World.
The development is likely to disrupt iPhone assembly lines in the Foxconn factories in the southern states of Tamil Nadu and Karnataka, which produce iPhones as part of Apple’s efforts to diversify production away from China. Some of the sources said the Chinese government is responsible for the suspensions of worker deployments and equipment exports.
“Currently, the equipment and manpower are not allowed to go over [to India],” one of the sources told Rest of World. “And India doesn’t have the technology to produce the equipment.”
Apple and Foxconn did not respond to requests for comment. Chinese and Indian government authorities also did not respond to requests for comment.
If sustained, the suspensions are likely to hinder the broader ambition of Apple to develop next-generation iPhones in India with Foxconn, its long-term Taiwanese manufacturing partner. It also highlights the difficulties Apple faces as it tries to diversify production away from China amid rising US-China tensions.
Apple moved production of some of its most advanced iPhone models to India after some factory operations were disrupted by China’s zero-Covid policies. This kickstarted a long process to shift the manufacturing centre for Apple’s flagship product, in order to reduce its decades-long reliance on China, also its second-largest market.
Foxconn began manufacturing iPhones at its Tamil Nadu plant in 2019, with the factory initially making older models. Foxconn started boosting its Indian facilities and workforce in 2022, with Apple aiming to enable India to undertake newer models as well. The two plants in Tamil Nadu and Karnataka together employ tens of thousands of workers.
However, production in India still relies on Chinese workers and a smaller number of Taiwanese expatriate employees, as well as specialised machinery from China. Foxconn and its equipment suppliers have deployed hundreds of managers, engineers, and technicians to oversee production and tool maintenance in India.
In recent weeks, however, Foxconn’s Chinese employees who were set to travel to India were told to cancel their trips, the sources said. One person said staff who had obtained visas and plane tickets were also stopped from traveling.
Some Chinese employees currently based in India were told they would have to return home before an unspecified date, some of the sources said. The directive was given verbally to staff, one Foxconn employee said.
To mitigate any potential impact from the suspensions, Foxconn is looking to move Taiwanese employees, whose travels to India are not impacted, in place of their mainland Chinese colleagues, two sources told Rest of World. Production and export of semi-finished iPhone products in its mainland China factories have also been stepped up to ensure that sufficient smartphones can be produced from final assembly in India in the meantime, the Foxconn source said.
Foxconn’s plan to shift early-stage iPhone production to India has been largely successful. In 2024, the Tamil Nadu plant assembled the latest iPhone Pro models for the first time. In the fiscal year ending March 2024, Apple assembled $14 billion worth of iPhones in India – or about one in seven iPhones – through plants operated by Foxconn, Pegatron, and India’s Tata Group, Bloomberg has reported.
Partly due to rising trade tensions between China and the West, many global corporations that have long relied on China for high-quality but low-cost manufacturing began moving their production to nations in South Asia or Southeast Asia. Disruptions caused by Beijing’s exceptionally stringent and long-running pandemic controls only accelerated the trend.
Companies were also motivated by concerns over increasing trade-related and political hostilities between China and the US, which began with the first Trump administration and continued with the Biden government, leading to tariffs and policies blocking China from accessing advanced technology.
The Chinese government may be alarmed by the manufacturing shifts particularly to India, seen as a geopolitical rival and democratic alternative to China, Kyle Chan, a postdoctoral research associate with Princeton University who studies industrial policies in China and India, told Rest of World.
“Maybe China is surprised, as many people were, by how quickly Apple was able to actually move some of its iPhone production to India,” he said. The Chinese government could also use the suspension to signal its leverage over US companies, he added.
India and China have long had a fraught relationship due to factors such as border disputes resulting in military standoffs and skirmishes along the Sino-Indian border. The two Asian powers are simultaneously lodged in an economic rivalry, where more corporations see in India an alternative to China as they restructure their supply chains, according to Harsh V. Pant, a professor and vice president of studies and foreign policy at the Observer Research Foundation in New Delhi.
But India continues to have a trade deficit with China, as it ramps up its complex manufacturing capability through Prime Minister Narendra Modi’s “Make In India” initiative. Beijing will take steps to prevent India from challenging its position as a global manufacturing powerhouse and ensure its dominance, Pant told Rest of World.
“The underlying tensions will continue to ensure that this kind of economic rivalry between the two will only escalate,” Pant said. “Many in India will read this in a very negative light, whether or not the Chinese government is involved directly [in the suspensions].”
Selina Cheng is a freelance reporter based in Hong Kong.
Viola Zhou is a reporter for Rest of World covering China's tech scene. She is based in New York City.
This article was originally published in Rest of World, which covers technology’s impact outside the West.
