Foxconn Plants New Seeds in India

Once again, Foxconn, the world's largest contract electronics manufacturer, has its eyes on India, and this time the investments may have more stability and longer reach.

The Taiwanese company appears to be taking several steps to build a bigger R&D and manufacturing base in India, according to reports.

A noteworthy one is presumed to be linked to the Indian government's “Make in India” campaign, a national program aimed at attracting investment and talent, extending its manufacturing infrastructure and encouraging innovation. On that front, Foxconn (known also as Hon Hai Precision Industry Co. Ltd.) inked a memorandum of understanding with Indian government officials pledging to invest $5 billion in an electronics factory and an R&D center that will create 50,000 new jobs. The Indian government will give the company 1,500 acres of land for the facilities, according to reports. 

The news came on the heels of other similar reports pointing in the same direction.

For instance, Foxconn is said to be in talks with India-based conglomerate Adani Group for a $3 billion project to make solar cells and panels in India (which may also involve Japan-based Softbank). Also, Foxconn and Adani Enterprises, part of the Adani Group, are discussing joint venture opportunities, but it remains unclear what products will be manufactured if the JV deal is signed (although the rumor mill is spinning up stories that this deal or Foxconn's other investment could involve producing Apple iPhones in India, while other reports say that's not likely to happen in the near term).

Additionally, Chinese cell phone maker, Xiomi, teamed up with Foxconn to start assembling phones in India, a deal aimed at cutting costs and grabbing a larger piece of India's growing phone market. India is the world's third-largest smartphone market. 

While press reports now peg Foxconn as one of India's largest foreign investors, some past memories will need to be reconciled as the company puts new stakes in the ground there. Foxconn's Chennai plant shut down in February 2015, a couple months after Nokia closed its India operations; Nokia India was Foxconn's Chennai plant sole client. Hundreds of employees were let go, and labor unions disputed the terms of Foxconn's settlement.

However, despite the bad feelings still lingering around the Chennai facility, Foxconn's recent moves are creating the sense of longer-term stability in the region. If nothing else, they match the company's 2020 vision of spending “a few billion dollars” on developing facilities there, according to Reuters. In May, Foxconn's chairman said it was planning to build 10-12 factories and data centers in India by 2020. Although Chairman Terry Gou is quoted as saying that customers are asking Foxconn to build facilities in India, the expansion plans come at a time when Foxconn, and others, are facing rising labor and operational costs in China, according to the news article.

4 comments on “Foxconn Plants New Seeds in India

  1. docdivakar
    September 22, 2015

    Besides the potential of producing Apple iPhones in India (which could take Indian electronic manufacturing to new heights), there is plenty of opportunities for making affordable hardware for the local market. The challenges are in keeping the labour costs low and streamlining supply chain.

    MP Divakar

  2. Barbide
    September 23, 2015

    Yeah I agree I mean the real big deal in the next years is to find a balance between low cost and quality for coutries as India for example

  3. Julieblogueuse
    September 30, 2015

    Well Im not really okay with you because you cant really have a high quality with low cost producting..

  4. Code promo
    October 13, 2015

    Of course you can't have quality with low cost but does people looking for quality in ourdays ?

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