Apple Partner Foxconn to Set Up $700 Million Plant in India, Create 100,000 Jobs in Big Move Away From China

Marking another milestone in the massive shift away from China, Apple manufacturer Foxconn is readying plans for a $700 million production hub in India.

Apple partner Foxconn Technology Group will set up the new plant in India's southern technology hub of Bangalore, Bloomberg reported, citing people familiar with the matter.

Apple iPhone 14 Pro Max
Apple iPhone 14 Pro Max Apple

End of Chinese Dominance?

For decades China was the backbone of the global supply chain, but the post-Covid era has seen solid changes in that pattern. India has emerged as one of the favorite destinations for global giants to set up production units and back-end operations.

Apple had cited labor unrest in Foxconn Chinese factories as one of the reasons behind its sluggish iPhone sales last year.

If Foxconn goes ahead with the India plans and the factory in Bangalore, in southern Karnataka state, materializes, it will contribute to the creation of as many as 100,000 jobs. In comparison, Foxconn's flagship Shanghai iPhone manufacturing facility has 200,000 workers.

As yet there is no official confirmation from Foxconn, which is known by its flagship company Hon Hai Precision Industry, about its new India plans. Apple also declined to comment on the news.

Foxconn Wikimedia Commons

Indian PM Narendra Modi's Success

Interestingly, Hon Hai chairman Young Liu met Indian Prime Minister Narendra Modi this week. Liu is currently in India and is reportedly holding discussions on setting up another manufacturing unit in Telangana, another southern Indian state well-known for the technology hub of Hyderabad.

Under Prime Minister Modi, India has polished its business friendly credentials, offering the much-needed political stability that eluded under the previous governments led by fractious coalitions. The Indian government, in recent years, has been promoting the 'Make in India' campaign aimed at grabbing a significant share of the Asian hi-tech manufacturing jobs.

Rising Production From India

Though India is a relatively new Apple manufacturing hub, the country, the Cupertino-based tech giant exported $1 billion worth of iPhones from India in the second half of last year.

The outlook for the manufacturing of Apple iPhones in India is quite robust according to Bloomberg data. The report says iPhone shipments from India to Europe and the Middle East is slated to hit a mammoth $2.5 billion in the 12 months through March 2023.

Apple started making iPhones in India in 2017 in a limited way, with the manufacture of iPhone SE. However, Prime Minister Narendra Modi's government announced huge incentives in the years that followed, which drove Apple's Taiwanese contract manufacturers explore the India option further.

apple iPhone Foxconn factory

Now, Apple's contract manufacturers Foxconn Technology Group, Wistron Corp. and Pegatron Corp make various models of iPhones in their India plants. At the moment, India only makes around 3 million iPhones whereas China makes a whopping 230 million units.

In a big push to its India manufacturing plans, Apple started making the latest iPhone 14 in India in September.

Apples' Troubles in China

In early February, Apple reported lower iPhone sales in the holiday quarter compared with the same period a year ago. The earnings report showed that the company missed analysts' expectations for revenue, profit, and sales. Apple's stock crashed 3 percent after the tech giant said the first quarter iPhone sales were nearly 5 percent lower than last year's.

Apple CEO Tim Cook explained that factors like strong dollar, production niggles in Chinese plants that hit iPhone 14 Pro and iPhone 14 Pro Max models contributed to the lower performance.

It was reported last November that Apple was expected to report a huge shortfall on iPhones. Unrest in the Chinese city that hosts Foxconn's mega iPhone plant will hit Apple hard, crippling its output and threatening deliveries, reports had said. The tech giant was looking at a production shortfall of as many as 6 million units of iPhone Pro this year, Bloomberg had reported.