Riding on high turnout in China, thanks to iPhone boom for over a decade, Foxconn is now eyeing Indian manufacturing base to be set up at about $5 billion (Rs.6,300 crore), including a research and development facility in Maharashtra.
Subash Desai, Maharashtra’s industries minister, said the largest electronics centre in India would provide jobs to about 50,000 employees and an MoU was signed on Saturday in Mumbai.
Acknowledging the move, Foxconn, which goes by the trade name Hon Hai Precision Industry Co Ltd. with its headquarters in Taiwan, said it would be a significant investment that “Foxconn intends to make in the next five years.”
Besides Apple’s iPhone smartphones, Foxconn also manufactures smartphones for Xiaomi, Balckberry, Amazon and Samsung. The locations is yet to be finalized.
India’s electronics industry has received $1.5 billion in foreign direct investment (FDI) in the last 15 years and $5 billion in the next five years would push the nation as a major destination of electronics products and especially the smartphones.
The deal, promoted under PM Narendra Modi’s “Make in India” plan to boost manufacturing base in the country would cater realise his vision to increase India’s manufacturing output to 25% of the GDP by 2022 from the current 18%.
With a billion plus population, India needs to provide more jobs by 2020 and at least 30% of the manufacturing base in the country would only help meet the burgeoning population in the country. Currently, China has 31% manufacturing base with more than a billion population.
Foxconn CEO, Terry Gou, who met Prime Minister Narendra Modi on Tuesday said more manufacturing units would be set up in other states and possible partnerships to meet the world’s fastest growing smartphone market.
Foxconn has shot up in news in 2012 when 150 workers threatened to commit suicide deploring poor wages and harsh working conditions. Though the company raised salaries after the incident, it is currently finding the Chinese labour conditions unfavourable with constantly increasing wages on par with the international wages.
Foxconn has factories in Asia, Europe, Mexico and Brazil that together assemble around 40% of all consumer electronics products sold and in china alone it has 12 factories, more than in any other country. Now the company will set up an equal number — 12 factories — in India and is likely to enter into a partnership with Adani group.