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India’s position as an attractive, viable manufacturing centre seems to be strengthening, as global manufacturers – including Foxconn – increasingly search for alternatives to China.
In a shot in the arm for the emerging market, the major Apple supplier has acquired a 300-acre land parcel in Karnataka state – touted as India’s IT hub – investing some $37m in a new mobile manufacturing plant.
The move indicates the Taiwanese electronics production giant is looking to expand operations in India and follows Foxconn chairman Young Liu’s recent visit to New Delhi.
During talks, the Foxconn chief also expressed interest in producing semi-conductors and electric vehicles in India.
Foxconn already has iPhone and other smartphone manufacturing facilities in the southern Indian states of Tamil Nadu and Andhra Pradesh and recently signed a deal to invest in Telangana state, with some 200 acres allotted by the local authority. Sources expect a firm announcement regarding the launch and other specifics of this project this week.
According to industry sources, a key factor driving the accelerated investor interest in India is a production-linked incentive scheme by the government.
After global companies began to diversify beyond China, Vietnam gaining the most from the so-called ‘China plus one’ move, India had been somewhat slow to take advantage of the dual-market trend. But the latest investment gains arguably dispel reports of stumbling blocks for foreign investors seeking to build large-scale production sites.
In another sign of the growing pace of global trade diversification from China, Apple cemented its footprint in India with the opening of retail stores in Mumbai and Delhi last month. Previously, the tech giant relied on third-parties for the distribution/sale of its products in the large consumer market with a burgeoning middle class.
Apple CEO Tim Cook also hinted at other investment plans in the offing for India. According to government data, Apple exported iPhones worth some $5.5bn in fiscal year 2022-23, out of India’s total $11bn smartphone export trade, mainly to the UK, Italy, France, the Middle East, Japan, Germany and Russia.
As global manufacturers widely see India as an alternative investment destination, supply chain improvements and more business-friendly policies to eliminate bureaucratic obstacles are critical.
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