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Foxconn is the largest manufacturer of electronics in the world. It makes sophisticated electronic items for some of the leading brands, including iPhone. The company has firmed up its plans to invest $5 billion in India. The manufacturing hub is going to export the products to Europe and US. It will serve as a parallel manufacturing hub to China.
Foxconn’s spokesperson said that the process is taken up in “exponential manner”. GST has given enough confidence for the company to establish operations in India. Moreover, the imposition of import duty on mobile phone parts from China and other foreign countries has also played a crucial role in company’s decision.
The company already has a footprint in India. It is going to upscale its process and bring in more capital. The company is on a positive note and will establish large scale manufacturing units in India.
The CEO of Foxconn Terry Gou had already cleared his plans to invest massively in India. Foxconn is looking forward to forging a strong partnership with the local manufacturing units and the industrial groups as well.
The investments will start to flow after this year has ended. Moreover, the major reason for the confidence booster is the imposition of tax on import of mobile and its peripherals. This is the main reason to establish capacity in India.
After the Indian government initiated tax benefits for those who source locally. There has been a rise in domestic markets in comparison to sourcing from China. However, the company is still concerned whether the 10% margin of difference will continue in the GST era as well. The government has imposed a duty of 10% on the sourcing of full mobile phone units from outside of India.
Foxconn’s expansion plans will create a huge number of jobs. Moreover, the states which will benefit the most are Maharastra, Utter Pradesh, Tamil Nadu, Telangana and Haryana.
Furthermore, the major part of the investment might go towards the setting up of the display fab. Therefore, this alone might gobble up around $3 billion of the total amount. Moreover, a total amount of $250 million will go into CNC for mechanical equipment. Further, the firm will invest in Lithium-ion battery factory as well. It also plans to set up facilities for PCB or printed circuit board which are used in manufacturing processes.
