Foxconn Technology Co. Ltd., a leading Apple Inc. supplier, has agreed to invest in India’s southern Telangana state to manufacture electronics. This move marks a milestone in Foxconn’s shift from reliance on China for manufacturing to a more diverse portfolio across Asia.
The deal was signed on Thursday and is reportedly worth over $300 million. According to the agreement, Foxconn will set up a new manufacturing facility in the state. The facility is expected to employ about 25,000 people and likely produce Apple products, including iPhones.
This move comes after Foxconn revealed plans to spend more than $10 billion in India over five years, beginning in 2016. The Taiwanese company has made several investments in India since then.
For Foxconn, this shift makes sense due to rising labour costs in China and the ongoing trade war between the USA and China. Foxconn is the largest private employer in China and has factories nationwide. But, with labour costs rising and the US-China trade war making it difficult to do business in China, Foxconn has been looking for alternative locations to manufacture its products.
India is an attractive option for foreign companies due to its large population, burgeoning economy, and liberal investment policies. The country has also been aggressively wooing foreign companies to set up shops. The Indian government has been taking a series of measures to make the country more attractive, such as cutting corporate taxes, offering tax incentives, and easing various regulations.