China Blocks iPhone Production Shift

By Sulagna Halder

New Delhi/Beijing, 3 July 2025:

Apple's plan to increase iPhone production in India is being thwarted by a covert but effective intervention by China. According to reports, Foxconn, Apple's main contract assembler, has recalled more than 300 Chinese engineers from its facilities in Tamil Nadu and Karnataka in response to Beijing's stricter restrictions on the export of skilled labor and necessary manufacturing equipment to India. 

According to industry insiders, this action, which has been in place for two months, is a part of China's larger diplomatic effort to thwart "Make in India" gains by preventing the transfer of technical skills and machinery. India's "speed of scale up will be impacted," according to a senior source, underscoring the issue's awareness at the government level. Alongside these limitations are delays in exporting specialised equipment and parts; some shipments currently sit on hold for months while Chinese authorities review and approve them.

Training for the upcoming release of the iPhone 17 series could be disrupted by the departure of Chinese employees, but Foxconn intends to make up for this by hiring engineers from Taiwan and Vietnam. However, experts caution that this could temporarily lower assembly line efficiency and slow the transfer of sophisticated technical skills. Experts interpret China's actions as gradual steps intended to "delay India's electronics ascent," maintaining global supply chain dominance. 

Economic analyst Surya Kanegaonkar cautioned that China could take advantage of India's continued heavy reliance on Chinese machinery, rare earth components, and technical skills.

In spite of these obstacles, India's iPhone production is still increasing, rising from 13 percent of the world's total in 2023 to about 20 percent in early 2025. With the support of Foxconn's $1.5 billion investment in local facilities, Apple plans to double production capacity and move the manufacturing of all iPhones headed for the US to India by 2026. Apple and Foxconn are adapting by increasing the hiring of Taiwanese and Vietnamese workers, rearranging current manufacturing technologies for local use, and investigating supply chains that are less reliant on China.

Industry leaders warn that India will continue to be susceptible to outside disruptions, particularly from China, until it establishes a domestic base for sourcing rare earth elements and high end manufacturing equipment. With strategic chokepoints influencing the future of global tech manufacturing, China's well timed restrictions serve as a reminder that global industrial decoupling remains a political balancing act. 

India is currently faced with the twin challenges of navigating the geopolitical currents of rival superpowers and increasing its domestic capability.