Foxconn plans to invest $1 billion in India: Sources

Foxconn plans to invest up to $1 billion to expand a factory in southern India where the Taiwanese contract manufacturer assembles Apple iPhones, as per the sources.

The move, the scale of which has not previously been reported, is part of a quiet and gradual production shift by Apple away from China as it navigates disruptions from a trade war between Beijing and Washington and the coronavirus crisis.

“There’s a strong request from Apple to its clients to move part of the iPhone production out of China,” one of the sources with direct knowledge of the matter said.

Foxconn’s planned investment in the Sriperumbudur plant, where Apple’s iPhone XR is made some 50 km west of Chennai, will take place over the course of three years, the second source said.

Foxconn Chairman Liu Young-way last month said it would ramp up its investment in India, without giving any further details.

Apple accounts for about 1% of smartphone sales in India, the world’s second-biggest smartphone market, where its pricey iPhones are often seen as a status symbol.

India is also working to boost electronics manufacturing by firms such as Foxconn and last month launched a $6.65 billion plan, offering five global smartphone makers incentives to establish or expand domestic production.

Taipei-headquartered Foxconn will add some 6,000 jobs at the Sriperumbur plant in Tamil Nadu state under the plan, one of the sources said. It also operates a separate plant in the southern Indian state of Andhra Pradesh, where it makes smartphones for China’s Xiaomi Corp, among others.

Having Apple widen its local presence is likely to be a boost for Prime Minister Narendra Modi’s flagship “Make in India” drive, aimed at creating new jobs.