China Throws a Wrench in India’s iPhone Ambitions
You cannot help but remain fascinated by how the two of the most populous countries in the world are neighbours sharing a large part of each other’s borders. No wonder conflict ensues, especially if you’re trying to woo the most valuable corporation in the world. When newly elected US President Donald Trump brought about a threat to the iPhone’s supply chain in China by implementing high import tariffs, Tim Cook intensified his focus on India. Now, not only is Cook facing pressure from Trump to bring iPhone assembly back home, as per the intent of the import tariffs, but China is actively working to undermine the company’s expansion in India. On July 2, Bloomberg reported that Foxconn, one of Apple’s biggest manufacturing partners, has asked hundreds of Chinese engineers and technicians to return from iPhone factories in India. Citing sources familiar with the matter, the report added that over 300 Chinese workers have left, and most support staff from Taiwan continue to remain in India. This is the second such instance this year. In January, Rest of the World reported that Foxconn is stopping ‘new work rotations’ for its Chinese employees at iPhone factories in India. Sources told the media outlet that ‘both the equipment and manpower are not allowed to go over to India’. Although it is unclear why Foxconn has taken this action, the development occurs amid China’s efforts to disrupt iPhone assembly lines in India. In the company’s Q2 2025 earnings call, Cook said that “For the June quarter, we do expect the majority of the iPhones sold in the US will have India as their country of origin.” Recently, it was reported that Foxconn exported 97% of iPhones assembled in India to the United States, marking a significant increase from 50% last year. Such has been Apple’s relationship with India, given the looming threat of tariffs on China. A few months ago, the company chartered cargo flights to transport 600 tonnes of iPhones from India to the United States. As a result, the Indian airport authorities reduced the customs clearance time for the aircraft from 30 hours to six hours. The Information, citing two people with direct knowledge of the matter, reported that the Chinese government refused to allow Apple’s equipment suppliers to export machinery to India that was needed for the upcoming iPhone 17’s trial production. The report added that this company set up a ‘front company’ in Southeast Asia to buy these machines and then ship them to India. Earlier this year, The Straits Times reported that Foxconn India imports specialised equipment from China, including voltage and heat testing machines, precision metal components, motorised tracks for assembly lines, circuit boards, and tool-making machines. “There is 70 per cent to 80 per cent reliance on machinery produced in China,” said a supply manager to the media outlet. Additionally, the report noted that Foxconn is increasingly relying on talent from Taiwan and Vietnam to counter the threats from China. Apple finds itself caught in a circular trap: desperate to escape its dependence on China by shifting iPhone production to India, yet India itself remains deeply reliant on China for the very components and infrastructure that would make this transition possible. The Challenge With India For one, India has its strengths that it can offer to Apple. The Indian government offers incentives for local production, and Apple’s partners, such as Foxconn and Wistron, have reaped significant benefits. Then, there is the total cost of manufacturing in the event of tariffs, where India offers only a 2% increase in the retail price of an iPhone, compared to the 30% posed by China. However, it is important to note that India primarily provides FATP—final assembly, testing, and packaging operations. Patrick McGee, in his New York Times best-selling book ‘Apple in China: The Capture of the World’s Greatest Company,’ highlighted many of India’s shortcomings and its reliance on China. “Apple does intend for India to become fully capable in every respect — but that’s likely to take a minimum of five to ten years, if it can be accomplished at all,” reads McGee’s book. A former senior engineer at Apple is quoted in the book, indicating the direction in which Apple is heading in India. “Historically, this engineer points out that when Japan, then Taiwan, and then China made their mark in global electronics manufacturing, they all started by supplying components, creating a foundation of technical expertise.” The engineer stated that only afterwards would a supplier of, for example, motherboards, start to vertically integrate and expand into final assembly, testing, and packing. “By contrast, Apple in India has been doing FATP for seven years and is only now trying to build up the competency of suppliers making parts.” The book also cited a supplier executive, who revealed that Apple is pushing ‘like hell’ to move into the country — but this pace will be constrained due to China’s interest in retaining control. Meanwhile, India’s component manufacturing sector is also growing, driven by Apple’s desire to reduce reliance on China and the Indian government’s new initiatives to promote local component production. Major international manufacturers of key components, including batteries, enclosures, camera modules, and display glass, are establishing production facilities in India. Simultaneously, Apple is actively recruiting local manufacturers as suppliers and encouraging existing partners to expand their manufacturing capacity. For example, Aques, a Karnataka-based company that manufactures parts for aerospace firms, was brought into Apple’s supply chain. However, many of these manufacturing facilities are established by Chinese companies (such as Lingyi iTech, Shenzhen Everwin Precision Technology, Sunwoda Electronic Company Limited, and more), and they will likely come under restrictions if the country takes harsher measures to disrupt operations in India.
Chinese engineers are returning back from Foxconn’s facilities in India. Earlier this year, Chinese government refused to allow Apple’s equipment suppliers to export machinery to India.
Chinese engineers are returning back from Foxconn's facilities in India. Earlier this year, Chinese government refused to allow Apple’s equipment suppliers to export machinery to India.
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Supreeth is an engineering graduate who is curious about the world of artificial intelligence and loves to write stories on how it is solving problems and shaping the future of humanity.