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How Foxconn's Decisions Could Impact Employment in India?

Foxconn's business operations are affected as a consequence of the workers being recalled as of January 12, 2025. Not only Foxconn's business operations are affected, even the overall state of the economy is affected.

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Preeti Anand
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The Taiwanese electronics manufacturer Foxconn has stopped offering fresh work rotations to its Chinese workers, according to a report by Rest of World. The work rotations to its Chinese workers at its Apple iPhone plants in India and is using Taiwanese labor instead. As per the article we sense fresh economic difficulties between China and India as a result of the recall of Chinese workers who are now employed at Indian plants. Foxconn's business operations are affected as a consequence of the workers being recalled as of January 12, 2025. Not only Foxconn's business operations are affected, even the overall state of the economy is affected. This is a major change in Apple's operational strategy by Foxconn that is Apple's main production partner. They have recently decided to stop fresh work rotations for its Chinese workers at its iPhone plants in India.

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What are Reasons Behind the Shift by Foxconn?

There are several factors that are responsible behind the suspension of the Chinese worker rotations. 

  • As we all are aware there are long-standing border disputes and economic rivalry between China and India. This causes uncertainty. The Chinese government is shaken by the manufacturing shift to India. India is taking up China’s market brilliantly which is a cause of concern and can be viewed as a geopolitical concern.

  • There have been a lot of delays in shipments. Shipments of manufacturing equipment and other important things have been delayed from China to India. This causes a problem to the entire network chain. India may face a logistical challenge that could hinder production capabilities. Sources indicate that "currently, the equipment and manpower are not allowed to go over." This is a serious matter of concern.

  • Foxconn is a leading company and this step taken by Foxconn is due to major issues. It is reassessing its workforce strategy for a smoother work experience. This is a response to geopolitical dynamics opting for Taiwanese workers. Automatically opting for Taiwanese workers will help Foxconn in its work operations. Taiwanese workers will not face the same restrictions as Chinese workers.

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Potential Economic Effects

Foxconn is also investing Rs 25,000 crore to establish a massive iPhone assembly and electronics manufacturing facility near Doddaballapur in Karnataka. Dubbed ‘Project Elephant’, this facility is set to be Foxconn’s largest outside Taiwan and is expected to employ over 50,000 workers.

  • Foxconn has invested heavily for the iPhone assembly lines in Tamil Nadu and Karnataka. As an immediate effect this could disrupt Foxconn’s investment. It may slow down Apple’s efforts to move production away from China. Therefore affecting the supply chains for the latest upcoming  iPhone models.

  • Trade and investment flows may be challenging as the Chinese workers are recalled. This will exaggerate the already-existing economic tensions between China and India. This is not just a mere circumstance that Foxconn is facing. Companies will eventually have to reassess collaborations in the technology industry.

  • Production may slow down at Foxconn’s plants. If it does, the local employment opportunities may be affected. Economic growth in these regions depend on the manufacturing jobs. Foxconn has plans to further expand in India but it may have to see a setback for sometime.

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How India Will Cope in Relation to Foxconn Strategy?

India may adopt several strategies

  • India is a skill based country. India can come up with training programs to fill the gaps left by Chinese workers. Investing in local talent for development focused on manufacturing technologies will be the best move.

  • India can focus on creating strong local supply chains. This will lessen the need for Chinese machinery and technology. 

  • The Indian government should strengthen diplomatic ties with Taiwan. As this is a chain network, India must maintain its relation with China to ensure stability in trade and investment flows.

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Conclusion

Foxconn and India will need to carefully manage these obstacles. This should be done to preserve production efficiency and promote economic growth. This decision will have a direct impact on the future of iPhone manufacturing in India. Apart from the iPhone manufacturing, it has a direct impact on  economic ties between the two biggest economies in Asia. Liu described intentions of expanding Foxconn's reach beyond smartphones by investigating industries like energy storage, digital health, and electric vehicles (EVs).

 

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