Foxconn to invest $1.5 billion in its India operations

NEW DELHI: Apple supplier Foxconn is set to invest $1.5 billion in its India unit, Reuters reported, citing a company filing. The iPhone maker has been shifting more manufacturing out of tariff-hit China.

As per the Reuters report, Foxconn’s Singapore-based subsidiary will buy 12.77 billion shares worth Rs 10 apiece, amounting to Rs 127.74 billion ($1.50 billion) in Yuzhan Technology India. Yuzhan Technology India, Foxconn’s unit in Tamil Nadu, manufactures electronic components and also assembles Apple’s iPhones.

Apple is positioning India as an alternative manufacturing base amid US President Donald Trump’s tariffs on China, which have raised supply chain concerns and fears of higher iPhone prices, Reuters had reported last month. In March, according to the Reuters report, Apple ramped up India production, exporting around 600 tons of iPhones worth USD 2 billion to the US.

As part of its Atmanirbhar and Make in India plan, the government launched production incentive (PLI) schemes in varied sectors, including electronics, to make Indian manufacturers globally competitive, attract investments, enhance exports, integrate India into the global supply chain and reduce dependency on imports.

Faced with supply chain disruptions, particularly since the Covid-19 pandemic hit in 2020 and subsequent flare-up of geopolitical tensions that continue, many leading global companies, particularly those in the manufacturing space, are diversifying their operations across regions. These visible trends of business diversification are basically to reduce risk and increase flexibility.

Given India’s political stability, huge market opportunity, dynamic workforce, and steady rise in income levels, it is being eyed as one of the best places to set up manufacturing bases.

In 2017, Apple started manufacturing iPhones in India. The Production Linked Incentive (PLI) scheme by the Central government, among others, is likely to have attracted several gadget makers, including Apple, to set up shop in the country. (ANI)