Foxconn will invest $500 million to set up factories in the southern Indian state of Telangana, the latest in a series of bets from Apple’s main contracting partner, as it expands its base in the South Asian market.
KT Rama Rao, Telangana’s IT minister, said in a tweet that Foxconn’s investment in the “first phase” will create 25,000 direct jobs. Foxconn, which already manufactures iPhones in India, won a bid to manufacture the AirPods in the country earlier this year, Reuters reported. It also bought $37 million worth of land in Bengaluru earlier this month, according to local media reports.
The financial incentives given by Indian Prime Minister Narendra Modi in recent years to boost local production have led to commitments from Foxconn, Wistron and Pegatron.
Foxconn entered India in 2006, years ahead of many of its global rivals. “During this time we have gained a lot of experience in managing local employees, the supply chain and logistics, all of which are key competitive advantages that have enabled us to move faster than the market. It has also enabled us to expand rapidly. Aside from continuing this momentum, we will also increase production revenue locally,” Foxconn Chairman Young Liu said on a recent earnings call.
“India has now reached a population of 1.4 billion people, which translates to a large potential market for mid to high-end products that our customers are targeting. Therefore, it is necessary for us to further expand the assembly and components activities in India. We see more and more suppliers investing in setting up factories in India and believe this will become more and more prominent over time. In terms of labor costs, India also has its advantages. Hon Hai will also continue to apply for government incentives to increase its competitiveness.”
The growing interest from Apple’s manufacturing partners also comes as the iPhone maker tries to expand its manufacturing infrastructure outside of China.
Apple, which opened its first two stores in India last month, could expand its iPhone production capacity in India to produce 25% of all iPhones by 2025, JP Morgan analysts said.
Jagmeet Singh contributed to this report.