Foxconn, the Taiwan based electronics contract manufacturing major in the world is looking to invest up to $ 5 billion in India (approx. Rs 34,000 crore), to set up a manufacturing facility parallel to China.
The Indian facility will play a significant role for export to markets across Europe and the US.
This move is an actuation of GST implementation which levies 10 percent customs duty on all imported mobile phones including accessories such as chargers, batteries, headsets and USB cables.
A top Foxconn official said that the company will soon ramp up Indian operations exponentially.
“India is already high on our priority list, and we now plan to step up investments and business here by opening new factories and expanding the manufacturing footprint,” he added.
The investment is expected to come in by the end of this year.
A major portion of the investment could go towards setting up of display fab unit. “This alone can see us invest around $3 billion. “It is said that about $250 million would be directed towards mechanics such as CNC. “The company will also invest in lithium-ion cell factory and facilities for printed circuit boards (PCBs) which are used in manufacture of devices.”
The company has a considerable capacity in India and can produce up to four million per month. “This was done as part of the preliminary investments. The big investments will happen now, and we plan to push up the manufacturing capacity to at least 10 million units per month in the first phase, while having a healthy supplier eco-system.”
Apple’s contract manufacturer Wistron, has started assembling the iPhone SE in Bengaluru two months back. Indian authorities have offered tax concessions for the work encouraging more local components to be used over time.
The recent initiatives by the government like “Make In India”, and now GST is is attracting high value foreign investments.
Foxconn provides phones for companies like InFocus, Oppo, Xiaomi, Nokia and Gionee from its existing manufacturing base in India. The official mentioned that Foxconn aims at “vertical integration” for its operations in India.
On export plans he said that dialogues are on with the commerce ministry to make sure that producing in India for the world is hassle-free. “We want a model where we get benefits of an SEZ in a domestic tariff area.India can be a large manufacturing base, just as China.“
Source: CXO Today