iPhone production in India: China bans export of “military technology”

Shortly before the start of the second Trump administration, the People’s Republic of China is apparently hardening its stance against Apple’s ongoing production relocation. As Japan’s financial news agency Nikkei reports, a new law is being used for this purpose, which regulates certain machines and components needed for production. Declared “military technology”. And then export controls or even export bans are imposed on them. It was already known that Apple’s efforts to set up large-scale iPhone production in India faced counter-measures from Beijing.

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Foxconn needs Chinese help

Apple invests a lot of money in Indian production facilities, which are then operated by manufacturers like Pegatron, Foxconn, Flex or Tata. The idea is to no longer be so dependent on China as a manufacturing location. So far, the switch is going fairly smoothly, and billions worth of current iPhones are already being assembled. But Apple needs expertise from China. For example, Foxconn has brought many employees from the People’s Republic to India to set up, monitor and manage plants. However, some of these had to leave the country and were replaced by Taiwanese employees – also due to the (re)emerging geopolitical conflict between the United States and China.

Nikkei now reports that, among other things, there are strict customs controls for so-called “dual-use” technology, which Beijing explicitly declares when manufacturing products. “Dual use” means that a product can also be used for military purposes and hence export is restricted. This in turn causes delays.

Vietnam is also affected by tight controls

Not only India is affected, but also Vietnam, where Apple is also currently significantly expanding its production. “In my observation, Trump’s tariff war threats and the decline of the Chinese economy are the main reasons for increasing Chinese customs controls,” Nikkei quoted a well-known supply chain expert as saying.

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The new law also appears to ensure that products and devices outside the “dual-use” list are subject to strict controls. It also includes tools that test smartphone performance data; Chinese customs simply declare them products “associated with military applications”.

(B.Sc.)