As the world falls over itself to “de-risk” supply chains and reduce its overwhelming dependence on China, Beijing is employing subtle yet aggressive tactics to stall the global technology transfer to India, one of its fastest-growing rivals. The latest flashpoint in this economic and geopolitical tug-of-war is the sudden withdrawal of hundreds of Chinese engineers and technicians from Foxconn’s iPhone factories in India, a move that exposes Beijing’s discomfort with India’s rise as a high-end manufacturing hub.
Foxconn Technology Group, Apple’s largest iPhone assembler, has reportedly directed hundreds of its Chinese workforce based in India to return home, even as the company prepares to ramp up production of the iPhone 17 and expands operations with a new factory in southern India. While no official explanation has been provided, the broader geopolitical backdrop makes Beijing’s motivations apparent.
Earlier this year, Chinese officials verbally instructed regulators and local authorities to quietly discourage technology transfers, equipment exports, and skilled labour migration to India and Southeast Asia. This informal crackdown reflects Beijing’s anxiety over the steady erosion of its manufacturing monopoly, as global corporations increasingly diversify production beyond China’s borders.
The Trump shock: Tariffs catalysed supply chain diversification
The seeds of this shift were sown during the first term of former U.S. President Donald Trump, whose aggressive tariff wars targeted China, the world’s second-largest economy, in an attempt to counter its growing influence. China has openly challenged U.S. hegemony across various sectors, including trade, technology, and artificial intelligence, as well as strategic infrastructure initiatives such as the Belt and Road Initiative. Its ambition to reshape the global world order with Beijing as the central axis has unnerved the West, triggering efforts to realign economic dependencies.
Trump’s tariff blitzkrieg, combined with export controls on critical technologies, served as a wake-up call for multinational giants like Apple, compelling them to dilute their dependence on a single country for production. The COVID-19 pandemic and mounting geopolitical tensions only reinforced this strategy. India, Vietnam, and Thailand emerged as preferred alternatives, offering scale, stability, and the promise of insulating business operations from geopolitical shocks.
Apple, for instance, set an ambitious goal of manufacturing most of its iPhones for the U.S. market in India by the end of 2026, a move that not only aligns with de-risking but leverages India’s large workforce and policy incentives. But China, facing economic headwinds, domestic demand slumps, and the risk of revenue losses to competing nations, is far from passive in this transition.
Beijing’s playbook: Subtle, strategic sabotage
China’s response has been predictably aggressive. Beyond formal restrictions on rare earth mineral exports vital for electronics and semiconductors, Beijing is now weaponising its skilled labour pool to slow rivals’ ascent. The withdrawal of Chinese engineers from Foxconn’s Indian operations is a tactical move designed to disrupt the transfer of technical expertise and manufacturing know-how essential for scaling production in India.
Apple CEO Tim Cook has long emphasised that China’s manufacturing supremacy isn’t merely about lower costs; it hinges on deep-rooted expertise, assembly line efficiency, and a vast ecosystem of skilled workers, advantages difficult to replicate overnight. The removal of Chinese personnel from Indian plants may not immediately affect product quality, but it hampers workforce training, slows technology absorption, and raises production costs, creating friction for companies eyeing India as a serious manufacturing alternative.
Beijing’s playbook: Subtle, strategic sabotage
China’s response has been predictably assertive. Beyond formal restrictions on rare earth mineral exports vital for electronics and semiconductors, Beijing is now weaponising its skilled labour pool to slow rivals’ ascent. The withdrawal of Chinese engineers from Foxconn’s Indian operations is a tactical strike designed to disrupt the transfer of technical expertise and manufacturing know-how essential for scaling production in India.
Apple CEO Tim Cook has long emphasised that China’s manufacturing supremacy isn’t merely about lower costs; it hinges on deep-rooted expertise, assembly line efficiency, and a vast ecosystem of skilled workers — advantages difficult to replicate overnight. The removal of Chinese personnel from Indian plants may not immediately affect product quality, but it hampers workforce training, slows technology absorption, and raises production costs, creating friction for companies eyeing India as a serious manufacturing alternative.
Economic power play: Beyond iPhones and assembly lines
The timing of this manoeuvre is no coincidence. Apple is on the cusp of ramping up new product lines in India, and Foxconn is building a major iPhone facility in the country’s south. The prospect of India capturing a larger slice of global manufacturing — particularly for premium products like iPhones — is a direct threat to China’s position as the world’s factory.
Moreover, Beijing’s actions send an unmistakable signal to other multinational corporations: relocating from China comes with consequences. Whether through labour withdrawal, equipment export barriers, or leveraging its rare earth dominance, China is prepared to use strong-arm tactics to ensure that companies remain tethered to its economy, willingly or otherwise.
India’s Tightrope: Pursuing growth amid geopolitical tensions
For New Delhi, the sudden exodus of Chinese engineers underscores the complexities of navigating global supply chain shifts. Though Foxconn informed Indian authorities of the withdrawals, no official reasons were cited. So far, production hasn’t suffered significant disruptions, but experts caution that delays in technology transfer could hinder India’s ambitious manufacturing targets.
This plays out against a broader backdrop of frosty bilateral ties. While high-level diplomatic engagements between India and China have resumed, deep-rooted mistrust lingers. Direct flights remain suspended post-2020 border clashes, Chinese apps like TikTok stay banned in India, and Beijing continues selective export restrictions, such as fertilisers crucial for Indian agriculture.
The way forward: Shadow battles for global manufacturing
As the battle for economic influence intensifies, the world is witnessing a quieter, more strategic form of confrontation — fought not through tariffs or troops, but through assembly lines, minerals, and technical expertise. China’s subtle sabotage of India’s manufacturing ambitions is emblematic of its broader resistance to ceding ground in the global supply chain hierarchy.
Yet, the momentum behind diversification is undeniable. Multinationals have learned the hard lessons of over-reliance on a single country, especially one entangled in geopolitical rivalries with the West. For India, this presents both a challenge and an opportunity to develop its own ecosystem of skilled labour, advanced manufacturing, and resilient supply chains, independent of Beijing’s influence.
As this high-stakes contest unfolds, one thing is clear: the future of global manufacturing will not be decided by cost alone, but by resilience, security, and the ability to navigate the geopolitical crosswinds shaping the 21st-century economic order.
