Apple and Foxconn are massively expanding operations in India. Here are their plans so far
- Foxconn is planning to invest about US$700 million to build a new plant in the Karnataka state of India.
- So far, approximately 5% to 7% of Apple’s manufacturing is in India, and India’s trade and industry minister said the company plans to increase local production to 25%.
Last month, one of India’s top government officials shared that Apple Inc. is looking to boost production in India, with the help of its partner Foxconn, to about a quarter of its global total. The goal, according to the Indian trade and industry minister, Piyush Goyal, is said to be part of the US tech giant’s plan to diversify from its primary manufacturing hub in China. Apple has yet to make an official response to Goyal’s statement, but updates from Foxconn, its main manufacturer, indicate that the iPhone maker is well on its way to boosting production in India.
Foxconn, a Taiwanese firm, is the largest supplier of Apple and a major manufacturer of iPhone components, with most of its plants in mainland China. However, over the last eight months alone, the electronics manufacturing giant’s chairman has met Indian Prime Minister Narendra Modi twice. Last week’s meeting was their second meeting after June 2022, when Modi met Young Liu and welcomed Foxconn’s plans to expand its electronics manufacturing capacity in India.
“Today we had a warm meeting with Honorable Prime Minister @narendramodi and updated him on our good progress in the country,” the Taiwanese major said in a tweet. “Foxconn will continue to build an ecosystem in India, allowing all our stakeholders to share, collaborate and thrive,” the company added.
Following the meeting, Telangana chief minister K Chandrasekhar Rao announced that Foxconn had signed an agreement to invest in the southern Indian state of Karnataka to manufacture electronics. Foxconn’s investment is expected to be the largest in India’s electronics sector and will create 100,000 jobs, Rao’s office said. The state government and Foxconn did not disclose the size of the contract manufacturer’s investment or specific products that it would make in the state.
Agreement signed with Foxconn, leading electronics major, to make major investment in state after a detailed discussion with co’s C’man Young Liu. It will expected to create 1 lakh jobs. 300 acres of land near Bengaluru Int. airport allocated.
— Basavaraj S Bommai (@BSBommai) March 3, 2023
However, according to Bloomberg, quoting people familiar with the matter, Foxconn plans to invest about US$700 million in the new plant, “underscoring an accelerating shift of manufacturing away from China as Washington-Beijing tensions grow.” Bloomberg Intelligence’s analysts Steven Tseng and Sean Chen reckon that the latest plan by Foxconn may herald an accelerated relocation from China.
“Once completed, we calculate this factory could materially improve the component suppliers in India and potentially boost the country’s share of iPhone assembly to 10-15% from a sub-5% currently,” they added. Separately, Rajeev Chandrasekhar, the Minister of State for Electronics and Information Technology in India, indicated that there would be an iPhone parts plant on a 300-acre site near Bengaluru’s Kempegowda International Airport.
Currently, iPhones are assembled in India by several Apple suppliers, including Foxconn. The Taiwan-headquartered company, formally known as Hon Hai Precision Industry, assembles the devices at a site in Tamil Nadu.
Besides plants related to Apple, Foxconn, in September last year alongside Vedanta, had signed a memorandum of understanding (MoU) with the Gujarat government to set up India’s first semiconductor manufacturing facility. The plan entails Vedanta setting up a display manufacturing unit with an investment of 945 billion rupees (US$11.95 billion) and separate chip-related production units by investing 600 billion rupees (US$7.58 billion), the state government said in its statement.
The dynamics are such that Foxconn is acting as the technical partner, while oil-to-metals conglomerate Vedanta is financing the project as it looks to diversify into chip manufacturing. Vedanta Chairman Anil Agarwal mentioned during the event in Gujarat, where an agreement was signed with the state officials, that the Vedanta venture aims to start manufacturing display and chip products within two years.
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