Foxconn move part of bigger China plan to scuttle India story: Report

While Foxconn still makes most iPhones in China, it has gradually built sizable assembly operations in India in recent years

China is working to a plan to hamper India’s efforts to emerge as a global manufacturing hub by cutting off or tightening supplies of raw material as well as talent, top intelligence sources told CNN-News18.

The reports of Foxconn sending more than 300 Chinese engineers and technicians back home from India, which has reportedly led to disruptions in iPhone production, is one such move.

The decision is aimed at denting India’s reputation as a reliable global supply-chain partner, the report quoted top intelligence sources as saying.

The timing coincides with India's push to expand high-tech manufacturing in sectors such as electronics and electric vehicles under the production linked incentive (PLI) scheme and the Make in India initiative.

It also comes as Apple looks to step up production of the new iPhone 17 with its manufacturing partners in India.

The neighbouring country has also tightened its restriction on fertiliser export and squeezed supplies of rare-earth magnets, a critical raw material whose scarcity has resulted in a crisis for automakers worldwide. The import of di-ammonium phosphate or DAP -- supplied by China in large quantity and also the second-most widely used crop nutrient in India – has also dwindled due to halting export clearances by China, according to a Hindustan Times report.

Sources told CNN-News18 that such moves are mapped out to signal to multinational companies that setting up operations in India could invite Chinese retaliation in the future.

Intelligence sources also confirmed that China has been involved in coordinated delay actions -- including pulling out over 300 Chinese engineers from Foxconn’s India plants and delaying export approvals for critical machinery, alongside restrictions on magnet exports.

These actions, as per top intelligence sources, are timed in such a way so as to affect deliveries during tariff-sensitive periods, especially in light of the tariffs by US President Donald Trump on non-US-made iPhones.

Even as Foxconn makes most iPhones in China, it has gradually built sizable assembly operations in India in recent years. It had deployed a large number of experienced Chinese engineers in the country to help speed up its expansion.

The livelihoods of many Indian workers and the broader supporting industries will also be significantly affected by the recent disruptions, intelligence sources warn.

The relationship between India and China has been under strain for years, as both countries vie for greater influence in the region. Tensions have eased somewhat since last year, and several senior officials like India’s defence minister and national security adviser have recently travelled to China for high-level meetings.