Foxconn recalls Chinese workers from India: Will it disrupt Apple’s iPhone production shift?

In a major blow to Apple Inc.’s manufacturing push in India, Foxconn Technology Group has asked several Chinese employees working at its iPhone factories in India to return home, foreign media reported. The development comes at a time when Apple was on track to ramp up the production of its next flagship smartphone, iPhone 17. 

Why did Apple’s biggest iPhone assembler send the workers home? 

Well, it's not yet clear why Apple's biggest iPhone assembler sent workers home, but it follows a broader trend by Chinese authorities to restrict the movement of technology, expertise, and equipment out of the country.

Earlier this year, Beijing informally urged regulatory agencies and local governments to limit such transfers to countries like India and Southeast Asia, according to reports.

Apple CEO Tim Cook has praised the skill and expertise of Chinese assembly workers, highlighting that this is the key reason — not just more favorable cost — for setting up the majority of Apple’s production in the country. The removal of Chinese workers from India will not impact the quality of production but is likely to affect efficiency on the assembly line, according to foreign media.

However, the change lands at a critical time, as Foxconn is building a new iPhone plant in southern India, and Apple has been accelerating efforts to shift more production out of China due to US-China trade tensions and rising tariffs under the Biden and Trump administrations. India now produces roughly 20 per cent of global iPhone output and is expected to assemble the majority of iPhones for the US market by 2026.

But Beijing's tightening grip over resource and labor exports is making that shift more difficult.  Since large-scale production started barely four years ago, Chinese engineers have been crucial to Apple's efforts to expand its operations in India.

Meanwhile, China-India relations remain fraught, with lingering border disputes and mutual trade restrictions still in place. While China continues to impose export restrictions on key products like fertilisers to India, India continues to prohibit Chinese apps like TikTok and restrict visas.