China is reportedly intentionally disrupting iPhone production in India in three ways
As part of its China Plus One policy, Apple is pursuing a business strategy to expand its manufacturing bases beyond China, where it has already invested, and is expanding its manufacturing bases in India and other countries. The Financial Times, an economic newspaper, introduced Apple's relationship with China and India.
Apple's quiet pivot to India
China seriously hindering iPhone production in India in three ways
https://9to5mac.com/2025/02/18/china-deliberately-hampering-iphone-production-in-india-in-three-ways-say-reports/
About 15% of iPhones are made in India, and that's expected to rise to 25% by 2027. But Indian and Chinese officials say the Chinese government is pressuring manufacturers to block the movement of Chinese engineers and capital goods to India.
This is reportedly a combination of three measures.
First, the Chinese government is making it harder for engineers to travel to India, as it tightens its grip on cutting-edge Chinese technology and seeks to keep crucial know-how within the country amid escalating trade tensions with the US and Europe.
Second, they are using export controls to block or slow the movement of equipment and parts. According to multiple industry sources and Chinese government notices, Chinese authorities have proposed new export controls to retain key battery technology and to restrict processing techniques for critical minerals.
Finally, Chinese parts manufacturers have been warned not to set up production plants in India, reportedly as a result of the new trade war with China launched by the Donald Trump administration, which has increased tensions, and the Chinese government is reportedly pushing back against the US, with the aim of blocking Chinese technology from passing through India to the US.
The Financial Times points out that Apple's relationship with India is also a big gamble for the Narendra Modi administration, which is under pressure to create jobs in India, where the unemployment rate is about 10%. iPhones manufactured in India are still largely assembled using parts imported from China, so in order for India to demonstrate its value to Apple, it needs to attract component manufacturers of the same caliber as China.
According to industry sources, Taiwanese group Foxconn Interconnect Technology's Hyderabad factory will soon start manufacturing AirPods for the first time in India. While the process of shifting some parts from China to India is progressing, industry sources point out that 'the transfer remains difficult and costly.'
According to research firm Counterpoint Research, the iPhone 15 will be India's best-selling smartphone model in the third quarter of 2024, with Apple capturing a 23% sales share, ahead of rival Samsung's 22%. That said, India remains a relatively small market for Apple, selling less than a quarter of the iPhones it sells in China. The Financial Times said, 'When asked about the company's India plans at its most recent earnings briefing, Apple CEO Tim Cook said only that the company needs certain 'economies of scale' to manufacture for both the domestic and export markets,' suggesting that the uncertainty surrounding India's outlook is a challenge for the future.
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