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India’s ambition to become a global iPhone manufacturing hub has hit another roadblock as Foxconn subsidiary Yuzhan Technology has recalled around 300 Chinese engineers from its operations in Tamil Nadu, according to a report in The Economic Times.

This marks the second such recall in recent months, highlighting the fragile balance between trade ambitions and geopolitics. The engineers were reportedly engaged in setting up a display module assembly unit in Tamil Nadu, a project backed by an investment of Rs 13,180 crore. 

The facility is a critical component of Foxconn’s larger strategy to strengthen Apple’s supply chain in India. Several new plants, including a major iPhone assembly unit in Bengaluru, are expected to become operational soon.

“Foxconn has informed the government that it was instructed to send back all Chinese expatriates employed by Yuzhan Technology to build the component ecosystem and factory. Around 300 engineers have returned, while another 60, who were scheduled to travel, have been told not to come,” the news organisation reported quoting people familiar with the matter.

The development coincides with reports that Chinese authorities have asked Foxconn Chairman Young Liu to submit a detailed report on the group’s investment plans in India.

Not the First Recall for Foxconn

This latest move follows a similar incident in July when approximately 300 Chinese engineers and technicians were sent back from Foxconn’s iPhone facilities in India. The recall comes as Apple accelerates its diversification strategy, moving production away from China after supply chain disruptions during the pandemic and rising trade tensions between Beijing and Washington.

Global Pressure on Apple’s India Shift

Apple’s manufacturing shift to India has drawn scrutiny from both China and the United States. Beijing has become increasingly resistant to Taiwanese firms relocating production, while US President Donald Trump has been urging companies to bring manufacturing back to American soil.

Meanwhile, India and China have been working to ease diplomatic strains, resuming direct flights and exploring ways to relax visa norms for Chinese professionals. Talks on cooperation in strategic sectors, including rare earths, remain tentative.

Trade Uncertainty With the US

Adding to the complexity, India-US trade negotiations remain stalled after Trump imposed a steep 50 per cent tariff on Indian goods and urged India to halt crude oil imports from Russia. Indian officials, however, have asserted that such decisions will continue to be guided by national priorities.

Foxconn Bets Big on India Despite Challenges

Despite these headwinds, Foxconn confirmed in May a $1.5 billion investment into Yuzhan Technology as part of its expansion plans in India. Currently, about 20 per cent of iPhones are assembled in India—a figure expected to climb to between 26 and 40 per cent by 2027.

Apple, in a parallel move to placate US authorities, recently announced an additional $100 billion investment in American manufacturing, adding to a previous commitment of $500 billion. The initiative is projected to create 20,000 jobs across 10 US states.