Taiwan's Foxconn plans iPhone manufacturing factories in India

Foxconn, a Taiwanese contract manufacturer, desires to increase its manufacturing foothold in India as part of an effort to diversify output outside of China in the midst of escalating tensions between Washington and Beijing.

This week, a team led by Chairman and Chief Executive Officer Young Liu travelled to the southern Indian states of Telangana and Karnataka in search of locations for new manufacturing plants, reports Nikkei Asia.

Karnataka chief minister Basavaraj Bommai and Rajeev Chandrasekhar, India's junior minister for electronics and technology, said in separate tweets on Friday that Foxconn will set up a plant to manufacture iPhones on the outskirts of Bengaluru, often referred to as the Silicon Valley of India.

"Apple phones to be built in a new 300 acre factory in Karnataka," Chandrasekhar said in a tweet, while Bommai said "... apart from creating 100,000 jobs, it will create a whole lot of opportunities for Karnataka."

The Foxconn delegation reportedly inspected a 300-acre plot less than 50 kilometres from the city's international airport, say unnamed state government sources.

According to reports, the corporation formerly known as Hon Hai Precision Industries, may invest more than $500 million in the Karnataka manufacturing factory.

The announcement on iPhone manufacturing in Karnataka comes a day after KT Rama Rao, the industries and commerce minister of neighbouring Telangana state, confirmed Foxconn investment there.

"With the mega investment coming our way in the form of Foxconn, and the huge employment opportunities it brings, youngsters of Telangana state will be truly happy," he tweeted on Thursday, adding that Foxconn's Liu lauded "Telangana's speed" of execution.

Foxconn will establish a "electronics" manufacturing plant in Telangana, according to a subsequent tweet from the office of the state's chief minister.

Foxconn intends to increase its manufacturing capacity in India after production at its massive Zhengzhou facility in China dropped significantly due to Covid-related problems. The Zhengzhou factory employs over 200,000 workers.

Apple is among a bevy of electronics and semiconductor businesses that are considering lowering their production dependence on China in favour of growing their operations in India, Vietnam, and Singapore. Apple wants India to contribute for around 25% of its entire output, up from the existing range of 5% to 7%, Indian commerce minister Piyush Goyal stated previously.

Now, the American tech giant produces iPhones in India with the help of Foxconn, Wistron, and Pegatron.

Tim Cook, Apple's chief executive, stated in February that India will be a "major focus" for the company, which aims to use the nation as both an alternate production base to China and a growth accelerator. He stated that Apple saw record iPhone sales in India throughout the period of October to December, without providing further data.

The government of India intends to develop the nation into a worldwide manufacturing powerhouse, including for electronics.

According to official data, India's electronics production reached $67.3 billion in the fiscal year ending in March 2021, up from $37.1 billion in fiscal 2016. Over this period, exports of electronics increased from $5.7 billion to $10.6 billion, adds the Nikkei report.

New Delhi has also authorised $10 billion in incentives to encourage domestic semiconductor manufacturing, with qualified manufacturing ventures receiving help for up to 50 percent of the cost of opening a business. Foxconn and India's Vedanta company have formed a joint venture to begin semiconductor manufacturing.