In a bid to expand its base in the South Asian market, Apple and Foxconn have teamed up to invest $500 million to set up manufacturing plants in the southern Indian state of Telangana. This was disclosed by the state’s IT minister said on Monday. The investment is the latest in a series of bets from the key Apple contract partner.
K.T. Rama Rao, Telangana’s IT minister, said in a tweet that the investment from the partnership will create 25,000 direct jobs in the first phase. As we know Foxconn, which already manufactures iPhones in India, won a bid to manufacture the AirPods in the country earlier this year. Meanwhile, according to local media reports earlier this month, the firm had also bought land worth $37 million in Bengaluru.
As far back as 2006, Foxconn entered the Indian market with its electronics technology and service provider. The firm expanded the market with its local employees and supply chain. In a recent earnings call with Techcrunch Foxconn chairman, Young Liu said the market has allowed them to expand quickly with much experience in managing local employees, supply chain, and logistics, which are all important competitive advantages.
“India has now reached a population of 1.4 billion people, translating to a large potential market for mid-to-high-end products which our clients are focusing on. Hence, we must continue to expand assembly and component operations in India, – Young Liu.”
We see that more and more suppliers are investing in establishing plants in India and believe that this will become more prominent as time goes on. As for labor costs, India also has its advantages. Hon Hai will also continue to apply for government incentives, to increase its competitiveness.”
Recall that not too long ago, India’s Prime Minister Narendra Modi’s financial incentives to drive local manufacturing attracted commitments from Foxconn, Wistron, and Pegatron to the country. Meanwhile, Apple is also attempting to expand its manufacturing infrastructure beyond China, due to the China-US tech war. Reports confirm that the iPhone maker will be producing its upcoming iPhone 15 in the country.
According to JP Morgan analysts, Apple, which this month launched its first two retail locations in India, might increase its iPhone manufacturing capacity there to create 25% of all iPhones by 2025. With these developments, the South Asian markets are expected to grow rapidly, particularly in the Indian market.
