- The production shift by Apple away from China would prevent a trade war between Beijing and Washington
- Local production of iPhones would widen the ‘Make in India’ initiative
- Foxconn is also planning to add around 6000 jobs in India under the plan
According to a report by the Economic Times, Taiwanese manufacturer Foxconn plans to invest upto $1billion to expand a factory in Southern India for assembling Apple iPhones.
It has been said that, the move is a part of a quiet and gradual production shift by Apple away from China as it navigates disruptions from a trade war between Beijing and Washington and the coronavirus crisis.
According to a report published in Reuters, it has been revealed that there’s a strong request from Apple to its clients to move part of the iPhone production out of China.
Foxconn said it does not comment on matters related to customers, while Apple did not respond to a request to a request for comment.
Meanwhile other sources have shared that Foxconn’s planned investment in the Sriperumbur plant, where Apple’s iPhone XR is made 50 km west of Chennai, will take place over the course of three years. Some of Apple’s other iPhone models, made by Foxconn in China, will be made at the plant, said both sources, who declined to be identified as the talks are private and details have yet to be finished.
Taipei-headquarted Foxconn will also add around 6000 jobs the Sriperumbur plant in Tamil Nadu state under the plan, one of the sources said. It also opted a separate plant in the Southern Indian State of Andhra Pradesh, where it makes smartphones for China’s Xiaomi Corp, among others.
Strategy
As mentioned earlier, Apple accounts for about 1% of smartphones sales in India, the world’s second largest smartphone market, where its pricey iPhone are often seen as a status symbol.
Building more phones in India will also help Apple save on import taxes that further push up its prices. Neil Shah of Hong Kong based tech researcher Counterpoint said “With India’s labour cheaper compared with China, and the gradual expansion of its supplier base here, Apple will be able to use the country as an export hub.”
India is also working to boost electronics manufacturing by firms such as Foxconn and last month launched a $6.65 billion plan, offering five global smartphone makers incentives to establish or expand domestic production.
With Apple widening its local presence, it would be a boost for Prime Minister Narendra Modi’s flagship “Make In India” drive, aimed at creating new jobs.
