China targets India's mfg sector, delays machinery delivery, pulls iPhone engrs

NEW DELHI: In what has the potential to disturb India's strong march in manufacturing, tensions with China have seen the neighbouring country delay delivery of critical machinery while ordering the pullout of some of its citizens from Indian factories, including those engaged in engineering and manufacturing jobs at Foxconn, Apple's contract manufacturer.This comes just as China has also put curbs on export of magnets to India that are used in making of automobile and electronic products.Sources said there has been a "massive pressure" at the operations of Foxconn in India, with the Taiwanese giant employing a "few hundred key Chinese personnel" at its factories in Tamil Nadu and Karnataka.iPhone mfg schedule may be hit as China pulls out techies While their strength is less than 1% of employees, they play a key part in managing operations, including production and quality.

With Chinese govt asking its citizens to pull out, it may create disturbance in production schedule of iPhones," a source said. Questions sent to officials of Apple and Foxconn in India did not get any response.Govt sources said the problem has been festering for the last few months and the companies, given the large global presence, have tapped some of their other operations for manpower.The situation is equally worrisome at the operations of top Chinese phone companies such as Oppo and Vivo, that have large manufacturing facilities in the country.

"While the companies have limited Chinese officials in India, they are worried about 'what more' can follow after this step. Please remember that both Apple and the Chinese makers import a lot of components from China that are used to manufacture final products in India," the source said.It is understood that Indian govt is seized of the matter, and there are also speculations that 'China may be doing a tit-for-tat on India', especially as their corporate personnel have faced a lot of issues in getting business visas.

"We intend to send a detailed report on the matter to the govt so that the issue is flagged off before it explodes into another crisis like the matter related to magnet supply," an industry source said.For Apple, India has emerged as a major production hub and the share of the company in India's export basket has grown severalfold in recent years and govt does not want any disruptions. Govt officials said that in the past China has often sought to block machinery to be used in key Indian factories after learning about the facility moving or coming up in India. These steps come at a time when companies are looking to diversify their production bases and are adding capacity in India, often at the expense of expanding in China or doing so at a slower pace.