Foxconn Is In Talks With State Governments Including
Maharashtra, UP, Haryana
Foxconn Technology Group is
looking to invest up to $5 Bn in India, to explore the possibility
of establishing a manufacturing hub parallel to China. The Indian hub will be
instrumental for export to markets across Europe and the US.
A top official at the
Taiwanese company told TOI that Foxconn will soon ramp up Indian operations in
an “exponential manner.” This move is powered by the implementation of
GST, and the imposition of an import duty on mobiles phones. The levy of
the duty and the tax combined will discourage sourcing goods from China
and other foreign locations.
Last week, the government
imposed a 10% customs duty on phones and key parts such as chargers, headsets,
batteries and USB cables. This will give an impetus to investments in local
manufacturing.
The source further added,
“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.” The investment is expected to flow in towards the end
of this year.
The stated that Foxconn is in
talks with various state governments. Discussions are on with Maharashtra,
Uttar Pradesh, Tamil Nadu, Haryana, and Telangana indicative of an upsurge in
employment opportunities if the deal goes through.
The company may invest up to
$3 Bn in setting up a display lab. Apart from this, around $250 Mn is
anticipated to be directed towards mechanics such as CNC (Computer Numerical
Control) revealed the source. The official also added, “The company will also
invest in a lithium-ion cell factory and facilities for printed circuit boards
(PCB) which are used in manufacture of devices.”
Currently, in its existing
capacity, Foxconn can produce up to 4 Mn devices per month.
However, post this investment, the company will look to expand manufacturing
capacity up to 10 Mn units per month.
The Foxconn Technology group
is a Taiwanese multinational electronics contract manufacturing company.
Originally known as Hon Hai Precision
Industry Company Ltd, the Foxconn Group is a Fortune Global 500
Company. It also assembles Apple’s iPhones and iPads, and has factories in
Asia, Europe, Mexico and Brazil. The company manufactures phones for Oppo,
Xiaomi, Nokia, and Gionee from its existing facilities in India.
Foxconn has also invested in Hike, Snapdeal, home-automation startup, WiZN
Systems, etc.
An interesting point to note
here is that Foxconn Chairman & CEO Terry Gou has already talked about the
implementation of these plans in 2015. He also spoke about partnerships with
local players and industrial groups, during his visit. No concrete steps have
been notified for the past two years. As per a report by Rediff, that appeared
in 2015, Foxconn had committed investment on the same lines in Vietnam in
2007, Brazil in 2009, Indonesia in 2012. However, the report claims
that only a small fraction of those commitments were met in reality. Given
the latest change in tax regime with GST, will Foxconn actually be pushed to
honour its commitment or will it be another announcement on paper remains to be
seen.
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