In the midst of the global anti-China sentiment due to China’s covert handling of COVID-19, companies and conglomerates around the world had been considering pulling slowly out of China in an effort to reduce China’s over-dependence on economic and industrial capital. According to sources, Foxconn, the Taiwanese electronic contract manufacturer, which assembles Apple iPhones in India, has expected to invest in India to the tune of USD $1 billion.
The investment plan in India is believed to be Apple’s move to shift iPhone production away from China and, as a result of the the tensions between the US and China, the its dependence on the region. Reuters has reported that Apple is strongly asking its customers to move part of the iPhone production out of China.
Currently, Foxconn has two plants in Tamil Nadu and Andhra Pradesh where it assembles smartphones from Apple and Xiaomi. At last month ‘s annual general meeting of the company, Foxconn Chairman Liu Young-way had said, “We are moving ahead entirely with the next steps there, and maybe in a few months ‘ time, we will announce the next steps and report back to everyone on our website. We’ll have another investment there, “without then disclosing any further information. However, neither Foxconn nor Apple commented on it.
The investment is expected to take place over three years and will also add around 6,000 jobs at the Tamil Nadu state’s Sriperumbur factory, which currently manufactures iPhone models in India. The plant manufactures the iPhone XR, the cheaper iPhone of Apple’s flagship family. Sriperumbur plant also manufactured the older version of the iPhone SE and some other versions that have been discontinued globally by the company.
The forthcoming investment is said to be in line with the Indian Government’s latest production-linked incentive (PLI) scheme. The PLI for Large Scale Electronics Manufacturing proposes a financial opportunity to improve domestic production and attract major investments in the supply chain of electronics including cell phones, electronic components including assembly, testing, labeling and packaging units (ATMP). Output Linked Incentives up to INR 40,951 crores would be paid over a 5-year period and Foxconn was reportedly among the companies that had applied to the government to obtain the benefits from the scheme.