Apple's India plans have two new threats: Trump and Xi

Creating an entire manufacturing ecosystem is complicated

- Mihir Sharma

Apple and its main manufacturing contractor Hon Hai Precision Industry are still betting on India.

When Hon Hai—better known as Foxconn—revealed through an exchange filing last week that it was putting another US$1.5 billion (S$1.9 billion) into its operations there, it will have calmed a few nerves in New Delhi.

Worries about the future of Apple in India had been set off by US President Donald Trump, who said in May that he had told the company's chief executive Tim Cook that "I don't want you building in India." This seemed to contradict hopes, shared by both Cupertino, a city in California's Silicon Valley and home of the Apple headquarters, and New Delhi, that most iPhones for the US market would come from India by the end of 2026.

But on the ground, Apple's turn to the South Asian nation seems well-entrenched. Reports have emerged of a new Foxconn campus meant to house 30,000 employees—the largest such effort in India's recent history—and that another contract manufacturer, Tata Electronics, is now assembling the iPhone 16 in its South Indian plant.

Yet, CEOs and politicians may have begun to realize that the difficulties involved in shifting or duplicating—an entire manufacturing ecosystem—extend beyond placating Mr. Trump. This is a complex environment, and there are severe obstacles to moving it out of China. US politics is only one, though perhaps the loudest.