Apple’s largest iPhone manufacturer, FoxConn Technology Group, or Hon Hai Precision Industry Co., has reportedly asked more than 300 Chinese engineers from its factories in South India to fly back, though the company’s motive is unclear.

Bloomberg reported that the move began two months ago, and leaves only Taiwanese support staff in Apple’s south Indian factories. This is significant in light of the recently announced launch of iPhone 17 and FoxConn’s India expansion plans announced in May, touted to produce most iPhones for the U.S. in India by 2026.

Loss of Chinese expertise expected to affect assembly line

Apple Chief Executive Officer Tim Cook has previously praised the expertise of Chinese workers, stating it as the primary reason for basing most of its production in the country and for ensuring high production standards.

Existing machinery mostly uses Chinese software. Apple’s assembly line efficiency is thus expected to take a hit, though product quality may remain unaffected. The withdrawal of Chinese workers could also signify increased production costs, since it will slow down both the training of local workforce and the transfer of technology.

U.S.-China tensions impact expansion plans of tech companies outside the two nations

Countries like India and Vietnam have been trying to attract tech companies to invest in their soil, leveraging the U.S.-China tensions to their advantage.

There has reportedly been a concerted effort to prevent Chinese companies from relocating manufacturing units to competing countries due to the ongoing U.S.-China trade conflict and rising tariffs on Chinese imports.

Regulatory agencies and local governments have thus limited skilled labour exports and technology transfers to India and Southeast Asia, urged by officials in Beijing .

The strategy goes beyond workers to technical knowledge and specialised equipment necessary for high-tech manufacturing.

FoxConn’s growth in India curbed by geopolitical tensions

FoxConn had begun to move its Chinese workforce to India in recent years, and had remarkably scaled up to producing one-fifth of iPhones worldwide in just four years.

The company had proceeded with its growth strategy despite Trump opposing production outside the U.S. and proposing a 25% tariff on iPhones produced outside the country.

According to the Bloomberg report, some machinery is to be converted in a few months to make it suitable to English speakers, and Taiwanese and Vietnamese workers are expected to replace those recalled.