Foxconn's India Investment: Where And Why?

Foxconn, the world's largest contract electronics manufacturer, has been investing in India by setting up manufacturing facilities in the southern states of the country. The company has an iPhone factory in Tamil Nadu, employing 40,000 people, and has announced plans to double its workforce and investment in India by 2024. In August 2023, Foxconn also committed to investing $600 million in two projects in Karnataka to produce casing components for iPhones and chip-making equipment. Foxconn's chairman, Young Liu, has expressed interest in investing several billion dollars in India, with the company acquiring land in Bengaluru and operating multiple factories across the country.

Foxconn's investment in India's southern states

Foxconn, the world's largest contract manufacturer of electronics, has been rapidly expanding its presence in India by investing in manufacturing facilities in the southern states of the country. The company is seeking to reduce its reliance on its Chinese factories and has set its sights on India as a key investment destination.

In the southern states of India, Foxconn has already established a significant presence in states such as Andhra Pradesh, Karnataka, Tamil Nadu, and Telangana. The company has received offers from multiple states and is reviewing proposals for large-scale industrial facilities. For instance, Telangana has proposed providing 2,000 acres of land for a 'Foxconn City', similar to the company's existing sites in Taiwan and China. This proposed site could potentially accommodate Foxconn's subsidiaries and suppliers from various countries.

In addition to Telangana, Andhra Pradesh has offered 2,500 acres for an industrial park, while Karnataka has put forward 300 acres for a supplier park. Foxconn has also expressed interest in establishing an ''industrial township' near Chennai, with the company's chairman, Young Liu, meeting with Prime Minister Narendra Modi to discuss investment plans.

Foxconn's current presence in India includes a facility in Sriperumbudur, Tamil Nadu, where it assembles iPhones, and a unit in Sri City, Andhra Pradesh. The company also has an upcoming facility in Karnataka, which will focus on iPhone production.

In terms of investment figures, Foxconn has committed to investing billions of dollars in India. In 2017, the company announced plans to invest up to $5 billion (around Rs 32,000 crore) in the country. More recently, in August 2023, Foxconn announced a $600 million investment in two projects in Karnataka to produce casing components for iPhones and chip-making equipment. This aligns with Foxconn's focus on electric vehicles, digital health, and electronic components as part of its expansion strategy.

The company's investments in India are expected to create a significant number of jobs. For example, the investment in Karnataka is expected to generate over 40,000 jobs, while the expansion in Telangana will create 100,000 jobs in the state. Foxconn's iPhone factory in Tamil Nadu already employs 40,000 people, and the company aims to double its workforce in India by next year.

The company's withdrawal from a $19.5 billion Vedanta chip plan

Foxconn, the world's largest contract electronics maker, has withdrawn from a $19.5 billion semiconductor joint venture with Indian conglomerate Vedanta. The decision is a blow to Prime Minister Narendra Modi's chipmaking plans for India. Foxconn said it had mutually agreed with Vedanta to end the joint venture and that it is working to remove its name from the entity, which is now fully owned by Vedanta.

The joint venture was announced in September 2022, with plans to set up semiconductor and display production plants in Modi's home state of Gujarat. Foxconn said at the time that the partnership would be a significant boost to domestic manufacturing of electronics in India. However, the project faced several challenges, including deadlocked talks with European chipmaker STMicroelectronics, which was intended to be a tech partner. India's government wanted STMicroelectronics to have more skin in the game, such as a stake in the partnership, but the company was not keen on that idea.

In the lead-up to Foxconn's withdrawal, there were signs of trouble. In May 2023, India's deputy IT minister, Chandrasekhar, told Reuters that the joint venture was "struggling" to tie up with a technology partner. A month later, India's market regulator fined Vedanta for breaching disclosure rules by publishing a press release that made it appear as though it had already partnered with Foxconn to make semiconductors in India, when the deal was actually with Vedanta's holding company.

Foxconn's decision to withdraw from the joint venture was announced in July 2023, with the company stating that it had determined it would not move forward but not elaborating on the reasons. A source familiar with the matter said that concerns about incentive approval delays by the Indian government contributed to Foxconn's decision. The Indian government had also raised questions about the cost estimates provided by the companies to request incentives.

Despite this setback, the Indian government remains confident about its plans to attract investors for chipmaking. In response to Foxconn's withdrawal, Union minister of state for IT Rajeev Chandrasekhar said that the decision had "no impact" on India's semiconductor fabrication goals and that both Foxconn and Vedanta were still valued investors in the country.

Foxconn's investment in iPhone production in India

Foxconn, the world's largest contract manufacturer of electronics, has been investing in iPhone production in India for several years. The company has expanded its presence in India by investing in manufacturing facilities in the southern states, including an iPhone factory in Tamil Nadu, which employs 40,000 people. In August 2023, the state of Karnataka announced that Foxconn would invest $600 million in two projects to produce casing components for iPhones and chip-making equipment. Foxconn's chairman, Young Liu, has expressed optimism about India's potential as a manufacturing hub, stating that "India will be an important country in terms of manufacturing in the future."

Foxconn's investment in India is part of a broader trend of "friend-shoring" by Apple, which aims to reduce its reliance on Chinese factories and diversify its supply chains. In the six months through September 2024, Apple exported $6 billion worth of made-in-India iPhones, with Foxconn's local unit accounting for half of these exports. This figure is expected to increase to $10 billion by the end of the year.

To further strengthen its position in India, Foxconn has committed to ramping up its operations and investments in the country. In July 2017, the company announced plans to invest up to $5 billion in India, with a focus on expanding its manufacturing footprint and opening new factories. Foxconn intends to create massive employment opportunities and is in talks with several state governments, including Maharashtra, Uttar Pradesh, Tamil Nadu, Haryana, and Telangana. A significant portion of the investments is expected to be directed towards setting up a display fab, lithium-ion cell factory, and facilities for printed circuit boards.

Foxconn's investment plans in India have been well-received by the Indian government, which views the company's iPhone factory and Apple's broader supply chain presence in the country as a boost to its economic development agenda. Prime Minister Narendra Modi has discussed Foxconn's investment strategies during meetings with the company's chairman, Young Liu. However, Foxconn's hiring practices in India have come under scrutiny, with a Reuters investigation in June 2024 revealing that the company excluded married women from jobs at its main iPhone assembly plant. Following media attention and government investigations, Foxconn ordered recruiters to remove age, gender, and marital criteria from job advertisements.

The impact of Foxconn's investment on India's economy

Foxconn's investment in India is expected to have a significant impact on the country's economy. As the world's largest contract manufacturer of electronics, Foxconn's presence in India has the potential to boost the country's manufacturing sector and create employment opportunities.

In 2023, Foxconn announced plans to double its investment and workforce in India within the next twelve months. The company already has a significant presence in the country, with an iPhone factory in the state of Tamil Nadu employing 40,000 people. Foxconn's chairman, Young Liu, has expressed optimism about the Indian market and the company's plans to expand its operations in the country.

The expansion of Foxconn's operations in India is expected to create massive employment opportunities. The company has set a target of employing 200,000 people in India within three years. This will not only provide jobs for a large number of people but also contribute to the development of a skilled workforce in the country.

In addition to job creation, Foxconn's investment is expected to boost India's manufacturing sector. The company has invested in manufacturing facilities in the southern states of India, with plans to make it a parallel manufacturing hub to China. This will likely lead to an increase in exports to key markets in Europe and the United States. Foxconn's investment will also encourage other companies to invest in India, further enhancing the country's manufacturing capabilities and its position in the global supply chain.

However, there have been some setbacks to Foxconn's investment plans in India. In 2023, the company withdrew from a $19.5 billion semiconductor joint venture with Indian conglomerate Vedanta. This dealt a blow to Prime Minister Narendra Modi's chipmaking plans and his ambitions of luring foreign investors to manufacture chips locally. Despite this setback, Foxconn remains committed to investing in India, and its overall investment in the country is expected to have a positive impact on the economy.

Foxconn's expansion plans in India

Foxconn, the world's largest contract manufacturer of electronics, has plans to rapidly expand its presence in India. The company currently operates about nine production campuses and has more than 30 factories in India, with a turnover of roughly $10 billion annually. Foxconn aims to double its workforce and investment in India by 2024, with a focus on southern states such as Tamil Nadu and Karnataka.

In August 2023, the state of Karnataka announced that Foxconn would invest $600 million in two projects to manufacture casing components for iPhones and chip-making equipment. Foxconn also has an iPhone factory in Tamil Nadu, employing 40,000 people. The company's chairman, Young Liu, has expressed optimism about India's potential as a manufacturing hub, stating that "several billion dollars in investment is only a beginning".

A significant portion of Foxconn's investments in India is expected to be directed towards setting up a display fab, which could cost around $3 billion. Additionally, the company plans to invest in lithium-ion cell factories and facilities for printed circuit boards (PCBs) used in device manufacturing. Foxconn manufactures phones for companies such as InFocus, Oppo, Xiaomi, Nokia, and Gionee from its existing facilities in India.

Foxconn's India representative, V Lee, stated in a LinkedIn post that the company aims to double employment, foreign direct investment (FDI), and business size in India by 2024. A senior government official indicated that Foxconn's investment in India, currently at $8 billion, could increase fivefold in the next three years, making the company a key part of the "big Apple story unfolding in India".

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