Foxconn is halting new work rotations for its Chinese employees at its Apple iPhone factories in India, and sending Taiwanese workers instead, according to five people familiar with Foxconn’s operations in India. Shipments of specialized manufacturing equipment meant for India have also been held up in China, the sources told Rest of World. 

The development is likely to disrupt iPhone assembly lines in the Foxconn factories in the southern states of Tamil Nadu and Karnataka, which produce iPhones as part of Apple’s efforts to diversify production away from China. Some of the sources said the Chinese government is responsible for the suspensions of worker deployments and equipment exports.

“Currently, the equipment and manpower are not allowed to go over [to India],” one of the sources told Rest of World. “And India doesn’t have the technology to produce the equipment.”

Apple and Foxconn did not respond to requests for comment. Chinese and Indian government authorities also did not respond to requests for comment.

If sustained, the suspensions are likely to hinder the broader ambition of Apple to develop next-generation iPhones in India with Foxconn, its long-term Taiwanese manufacturing partner. It also highlights the difficulties Apple faces as it tries to diversify production away from China amid rising U.S.-China tensions.

Apple moved production of some of its most advanced iPhone models to India after some factory operations were disrupted by China’s zero-Covid policies. This kickstarted a long process to shift the manufacturing center for Apple’s flagship product, in order to reduce its decades-long reliance on China, also its second-largest market.

Foxconn began manufacturing iPhones at its Tamil Nadu plant in 2019, with the factory initially making older models. Foxconn started boosting its Indian facilities and workforce in 2022, with Apple aiming to enable India to undertake newer models as well. The two plants in Tamil Nadu and Karnataka together employ