Foxconn plans $2 billion investment in India

Aug 06, 2015, 08:46 am

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By Ha Man-joo, India correspondent, AsiaToday - Foxconn Technology Group is set to invest $2 billion in building manufacturing plants in India over the next five years to produce mobile devices, smart TVs, precision mechanics, batteries, storage, switch routers, key electronic components, among others, and appears to have already selected its partners and joint ventures in India.

India media outlet reported that Foxconn's investment could be the biggest foreign investor in the government's "Make it India" policy driven by Prime Minister Narendra Modi so far. If the world's largest contract manufacturer enters the Indian market, competition becomes inevitable with Korean companies, such as Samsung Electronics and LG Electronics, who already have manufacturing plants in India.

Foxconn Chairman Terry Gou held an emergency press conference late Tuesday evening, and revealed he is looking to invest at least $2 billion initially to establish 10-12 manufacturing plants over the next five years.

"We see India as a manufacturing, expansion and export base. We will establish our supply chain and the entire ecosystem in the country with a more than ten years time frame in mind," Gou said.

Gou pointed out that there are problems for the Indian government to be solved before making the investment. He said, "Foxconn is ready to make a huge investment. The ball is in the Indian government's court now," asking for the government's support for infrastructure, supply chain, warehouse, and other efficiencies. In addition, he shared concerns about tariff protection to encourage domestic manufacturing, and asked for tax benefits and financial incentives for the next several years.

Gou said, "We are making plans for a 10 year horizon, but there are many challenges to overcome in order to do this. This is why we have not revealed any further details."

Despite his remarks, Gou decided to making investment in India. According to the industry, Gou was in a dilemma regarding investments in India but he made his investment decision after meeting with PM Modi on August 3. Gou highly praised Modi's vision of India, and the two shared personal matters, such as their same birth year.

Gou also had a meeting with Telecom Minister Ravi Shankar Prasad on August 4. About 7-8 presidents of Foxconn's different business units including mobile phones, networks, TVs, etc - which is about 40 percent of the group's total business heads - came along with Gou, showing Foxconn's India plans are in the embodiment step.

Foxconn is already working with India's No. 3 ecommere player Snapdeal, Samsung's smartphone rival Micromax, and refurbished goods e-tailer Greendust, and also in talks with Adani Enterprise, the flagship company of India's largest energy company Adani Group, to form a joint venture.

#Foxconn #India #investment #Make it India 
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