InvestorQ : Will the Foxconn investing in India be a boost for Make in India program?
Debbie Mascarenhas made post

Will the Foxconn investing in India be a boost for Make in India program?

Crowny Pinto answered.
1 year ago

Foxconn plans a massive investment of $1 billion to expand a factory in the southern part of India where the company currently assembles Apple I-Phones. Foxconn is a Taiwanese contract manufacturer and one of the largest outsourcer for Apple. Foxconn move is linked to Appleā€™s decision to gradually move away from China due to ongoing Sino-US trade war.

The planned investment by Foxconn in the Sriperumbadur plant in Tamil Nadu is where Apple's I-Phone XR is currently manufactured. The entire $1 billion investment will happen over the next 3 years and Apple is also betting on this shift out of China as part of its long term strategy to serve the Asian market substantially via India.

Foxconn will add close to 6000 jobs at the plant in Tamil Nadu state and as part of the plan, some of the products currently manufactured in China will also be shifted to India. Currently, Foxconn also operates a plant in the state of Andhra Pradesh where it manufactures smart-phones for China's Xiaomi Corp and many other big names.

There is also a market penetration angle for Apple. I-Phones account for just 1% of smart phone sales in India. Building more phones in India will help Apple save on import taxes that push up prices. With India's cheaper labour compared to China and the expansion of its supplier base, Apple plans to use India as an export hub. This also gels with Make in India plan as India launched a $6.65 billion incentive plan for smart phones.