Foxconn commits $500 million to set up new manufacturing unit in India

Apple’s largest contract manufacturer, Foxconn, has committed to investing $500 million in setting up a new manufacturing unit in the Indian state of Telangana.

“Demonstrating the ‘Telangana Speed’, I am happy to announce the groundbreaking of first of Foxconn’s plants in Telangana at Kongar Kalaan today. With an investment of over $500M it shall create 25,000 direct jobs in first Phase,” Telangana’s IT minister KT Rama Rao said in a tweet.

Foxconn — also known as Hon Hai Precision Industry Co. in China as well as in its home base of Taiwan — is expected to manufacture Apple products, most likely Airpods, in the new facility as Apple looks to shift some of its manufacturing from China.

In January, India’s trade minister Piyush Goyal said Apple was looking to increase its share of manufacturing in India to 25% from 5-7%, according to a Reuters report.

This was followed by another Reuters report in March that claimed Foxconn won a significant manufacturing order for AirPods from Apple and was planning to set up an assembly unit in Telangana with a commitment of over $200 million.

Foxconn’s decision to open a new manufacturing unit in Telangana comes when the world faces global supply chain challenges due to ongoing trade wars between China and the US.

The past few months have seen tensions between the US and China escalate, especially in chip manufacturing, leaving several chip makers and enterprises in the crosshairs. 

Apple has been trying to move out most of its manufacturing out of China by shifting its supply chain to India, in an effort to avoid being in the middle of the tension between the economic superpowers.

Last week, US networking giant Cisco Systems announced a manufacturing plant in India to broaden its global supply chain. Cisco’s choice of India can be seen as a replacement for China, analysts said.

In March, Foxconn received approval from India’s state of Karnataka to invest nearly $968 million.