Apple’s high-end iPhone production is moving to India next year, according to a new report.
The tech giant’s manufacturing partner Foxconn will begin assembling higher-end iPhones in India next year and invest $356 million in the country to expand its existing iPhone production plant, Reuters is reporting, citing people who claim to have knowledge of the plans. The investment will create up to 25,000 jobs in the country and reduce Foxconn’s (and Apple’s) manufacturing presence in China.
Foxconn has been assembling lower-end iPhones, including the iPhone SE, in India. However, the company has kept its higher-end iPhone production in China, where iPhones have been assembled since their initial release in 2007. Moving assembly on the more powerful devices, including the iPhone XS and iPhone XS Max, marks an important change in policy for both Foxconn and Apple.
The decision to move assembly from China to India could be prove to be critical to keeping iPhone costs down. The U.S. and China are at odds over trade and there has been some suggestion that if a full-blown trade war between the countries erupts, tariffs on iPhones could drive Apple’s prices up significantly. Moving iPhone production to India mitigates that risk and also helps Apple improve its relations in the critically important Indian market where the middle class is soaring and import taxes on products companies want to sell there are still quite high.
It’s unclear exactly when Foxconn would begin producing higher-end iPhones in India.
Apple did not immediately respond to a Fortune request for comment on the report.