Why Foxconn is eyeing India

China's largest private sector employer and exporter is looking to hedge its bets against disruptions in chip supplies and foray into white-label EV manufacturing

- SURAJEET DAS GUPTA New Delhi, 10 March

Last week, Foxconn Technology group, the world's largest electronics manufacturing services (EMS) player, was caught in the middle of a controversy.

The fiercely competitive governments of Telangana and Karnataka nearly simultaneously claimed that the Taiwanese giant had signed up to make big investments in their respective states to manufacture electronics, which would generate over 100,000 jobs in each state.

The Taiwanese company added to the fire by saying that no "definitive agreements" for fresh investments had been signed. The next day, it walked back that statement by sending letters to both chief ministers saying it was committed to the agreements that it had signed with the two states, which included investing in a new Apple Inc plant in Karnataka, an EV plant and an EMS facility.

This drama, though avoidable, reflected the fact that Foxconn means serious business in India. Its delegation to India was led by its Chairman Young Liu who met Prime Minister Narendra Modi.

With over 65 per cent of its production base in China, Foxconn is also China's largest private sector employer and exporter. But like its biggest customer Apple Inc, it also wants to hedge its bets. Especially as it makes forays into newer areas white-label electric cars and semiconductors.

For Foxconn, this is an opportune moment to diversify manufacturing locations.

Last year, its Zhengzhou factory in China faced labour unrest due to stringent Covid restrictions that disrupted production and adversely impacted Apple's revenues. That experience underlined the need for alternative assembly units in other countries.