AirPods Production Plans in India Hit Roadblock—Blame China

Apple’s plan to scale up AirPods production in India has hit a strategic roadblock—one that highlights just how deep China’s grip on global electronics still runs. According to a report by Moneycontrol, the issue stems from a shortage of dysprosium, a rare earth element critical for the magnets inside AirPods. And while the earbuds continue to roll off the lines at Foxconn’s Telangana facility, the supply chain stress is real—and increasingly geopolitical.

Dysprosium is not easily replaceable. It is essential for producing compact yet powerful magnets that drive haptic responses and audio performance in wireless devices. But China dominates the mining and export of this metal, and recent tightening of export controls has complicated procurement for firms operating outside the country. This is where Apple and its contract manufacturer, Foxconn, are feeling the heat.

The timing has only raised eyebrows. The supply constraint comes just weeks after Foxconn relocated over 300 Chinese engineers from its Indian facilities. While the official explanation rests on export restrictions, the broader context has sparked speculation: Is this a logistical hiccup—or a subtle message?

Foxconn is not taking chances. The company has escalated the matter to multiple levels of the Indian government—from the Telangana administration, where its AirPods manufacturing facility is located, to MeitY, DPIIT, and even the Prime Minister’s Office. The hope is to break the deadlock through diplomatic backchannels or special exemptions, potentially by securing what is known as an End User Certificate—a requirement for China to clear exports of sensitive materials.

Despite the setback, production has not immediately stopped. Both Apple and Foxconn had anticipated some friction and reportedly stockpiled enough raw material to sustain short-term operations. But that buffer may not hold forever. If the deadlock stretches, timelines, costs, and even product configurations could take a hit.

As Neil Shah of Counterpoint Research told Moneycontrol, the incident underlines a hard truth: the global tech ecosystem—despite years of diversification talk—remains deeply reliant on China for critical inputs. Rare earth elements like dysprosium are a clear example. Without them, it is not just production that stalls; product quality risks degradation.

Foxconn’s India unit currently contributes a small slice of Apple’s global AirPods output, but the facility was seen as a key node in Apple’s China+1 strategy. With supply risks mounting, rivals like Luxshare and Goertek—already operating out of Vietnam—may gain an upper hand.

More importantly, the episode casts a long shadow over India’s electronics manufacturing ambitions under the PLI scheme. If such material dependencies remain unresolved, they could slow down the momentum just when India is trying to project itself as a credible alternative to China.

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