India's Apple-led electronics dream runs into China bump

India's ability to expand its assembly lines without Chinese technology experts is in question

- Shouvik Das

Foxconn's recent recalls of key Chinese technology specialists from its Indian arm may hurt Apple's capacity to scale up the production of iPhones in India, hampering the country's ability to quickly boost its net earnings by churning out these high-end smartphones, government officials, industry executives, and analysts said.

Four people that Mint spoke with said while the withdrawals may not lead to a major disruption for Apple or Bharat Foxconn International Holdings Ltd (FIH), at stake is India's ability to expand its assembly lines without oversight from Chinese technology experts, partners and stakeholders.

For now, China's move appears to be restricted largely to Rising Stars Hi Tech—a wholly owned subsidiary of Foxconn's India unit, Bharat FIH, a senior government official said.

The "net" earnings from India's electronics industry, commonly referred to as "domestic value addition", refers to the industry's total contribution to India's economy—after paying all due royalties to foreign entities supplying the requisite infrastructure.

It is this that came under the scanner after Bloomberg reported on 2 July about China urging Taiwan's Foxconn to recall key executives—thus halting localization of technologies critical to expanding the electronics manufacturing ecosystem in India.