Foxconn plans to double investment, workforce in India

Foxconn will be doubling its investment and workforce in India over the next 12 months, according to company representative V Lee's LinkedIn post sending birthday wishes to India’s Prime Minister Narendra Modi.

“We will work even harder to present you with a greater birthday gift next year, aiming for another doubling of employment, FDI [Foreign Direct Investment], and business size in India,” says V Lee’s LinkedIn post.

The Taiwan-based electronics contract manufacturer has a massive presence in India. Its factory in Tamil Nadu manufactures iPhones for Apple and employs around 40,000 people.

Last month, the Karnataka government revealed that Foxconn would invest $600 million in two projects to make casing components for iPhones and to produce chip-making equipment. As part of these, Foxconn will invest $350 million to build an iPhone casing component unit, generating 12,000 jobs and $250 million for chip-making tools in partnership with Applied Materials.

Apple’s decision to increase production in India is going to boost India’s position as a manufacturing hub of electronics and smartphones. The country has been trying to become a manufacturing center, especially in the wake of several companies trying to move out of China.

Apple has been keen to move at least a part of its manufacturing operations from China to India following the disruption of production in China caused by the COVID-19 pandemic. At one time, more than 300,000 people were employed in the production of Apple products in China, with media reports saying that Apple plans to move at least 40% to 45% of its manufacturing to India.

The company’s decision to manufacture in India is also possibly the result of its growing market share in the country. While it held just 2% market share in 2019, Apple’s iPhones are likely to acquire 7% market share by the end of this year.

Geopolitical factors have changed equations between China and the US which has also contributed to Apple’s decision to move manufacturing out of China. Recently, there were also reports of the Chinese Government putting a ban on Apple products because of security concerns. However, these reports were later denied by the Chinese Government.

Foxconn was in the news recently for walking out of a $19.5 billion joint venture with Vedanta to set up a semiconductor manufacturing unit in India. However, media reports suggest that it has applied for government’s incentive separately. It is not clear if the doubling of investment includes its investment to set up a semiconductor unit as well.