Amid the ongoing Sino-US trade conflict, Apple is working to increase iPhone production in India to reduce its reliance on "Made in China". However, the plan has been obstructed, with Chinese authorities accused of delaying or even blocking the shipment of iPhone manufacturing equipment to India without warning in many cases.
India currently assembles approximately 30 to 40 million iPhones annually, accounting for about one-fifth of the global total. Apple sells over 60 million iPhones annually in the United States, accounting for approximately 28% of global sales last year. The Financial Times reported that Apple plans to shift all iPhone assembly in the United States to India by the end of next year, meaning the number of iPhones assembled in India will double. Apple declined to comment.
The Information reported that during the 2019 coronavirus pandemic, China implemented strict lockdown measures that disrupted production lines, and Apple began to accelerate the relocation of its manufacturing operations out of China. Now, the Trump administration in the United States has imposed high tariffs on Chinese-made products, making it even more urgent for Apple to diversify its manufacturing operations. Its goal is to move about 50% of iPhone production capacity out of China, but this process is facing resistance from the Chinese government.
Approval period shortened from 2 weeks to 4 months
According to people familiar with Apple's Chinese supply chain, the authorities are deliberately delaying Apple's move of iPhone production lines to India to prevent job losses from impacting the economy. Local governments have even warned manufacturers in Apple's supply chain not to cut local jobs.
The report pointed out that it has become increasingly troublesome to ship manufacturing equipment from China to India. For example, the application of assembly contract manufacturer Foxconn to transfer iPhone manufacturing equipment from China to factories in India has been extended from the original 2 weeks to up to 4 months; the authorities will reject some export applications without providing any reasons; China will specially review the high-precision laser machines that weld metal parts to the iPhone body frame, the airtight testing stations used to test waterproof performance, and equipment called "chip mounters."
Apple is seeking to obtain equipment needed to manufacture iPhones from countries outside of China, and has begun urging some Chinese equipment suppliers to set up factories in Southeast Asia to circumvent restrictions. Some manufacturers said that Apple may also switch to purchasing equipment produced by Japanese, South Korean and Taiwanese manufacturers, even if the price is higher.
