Foxconn’s Yuzhan Technology recalls 300 Chinese engineers; could upset India’s iPhone market
The development comes as India and China attempt to reset bilateral ties
Yuzhan Technology, a subsidiary of Foxconn, has recalled 300 Chinese engineers from its Indian operations. This is the second such move in recent months, as the same number of engineers and technicians were recalled in July.
The development comes as India and China attempt to thaw relations, even as geopolitical and trade pressures mount.
The engineers were involved in setting up a display module assembly facility in Tamil Nadu, where Yuzhan is investing Rs.13,180 crore.
The unit is a part of Foxconn’s broader strategy to expand its iPhone manufacturing hub in the country, with multiple new assembly plants, including in Bengaluru, expected to soon launch online operations.
Foxconn is known to have informed the government about instructions to send back the Chinese expatriates employed by Yuzhan, to build the component ecosystem and factory. While 300 engineers have returned, 60, scheduled to travel, have been told to hold on.
Meanwhile, Chinese authorities have directed Foxconn Chairman Young Liu to submit his report on the group’s investment plans in India.
The company’s India expansion comes as Apple diversifies its supply chain after the Covid-19 pandemic-era faced disruptions when Chinese lockdowns halted production. The shift was further accelerated after US President Donald Trump took office, fuelling fears of a prolonged US-China trade war.
Apple’s move has earned the ire of both China, which tightened its stance against Taiwanese companies shifting manufacturing to India, and the US, where President Trump wanted manufacturing to be moved back to America
The recalling of staff comes as India and China attempt to reset bilateral ties. Both sides have eased border frictions, restored direct flights, and expanded business exchanges. The Indian government is also considering relaxing visa rules for Chinese professionals.
Even though progress is yet to happen, talks on cooperation in strategic sectors, including rare earths, are underway.
On the contrary, trade talks between India-US remain unresolved after President Trump imposed a 50 percent tariff on Indian goods, the highest globally. The American administration also pressured India to cease its purchase of crude oil from Russia. However, Indian officials have maintained that oil purchases, along with any other trade decision, will be determined by domestic needs.
In May, Foxconn, the world’s largest contract manufacturer for Apple announced investing $1.5 billion in Yuzhan Technology to accelerate diversification outside China.
Meanwhile, 20 percent of iPhones are currently assembled in India. The figure could rise 26 percent to 40 percent by 2027.
To appease the US President, Apple recently announced an additional $100 billion investment in manufacturing. This builds to the $500 billion commitment made by the tech giant in February. The move could create 20,000 jobs across 10 US states.