Taiwan’s Foxconn plans Rs31,500 cr investment in Maharashtra

10 Aug 2015

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Taiwanese electronics giant Hon Hai Precision Industry Co Ltd, traded as Foxconn Technology, plans to invest $5 billion (Rs31,900 crore) over five years in India's western state of Maharashtra, giving a big boost to Prime Minister Narendara Modi's ''Make in India'' campaign launched last year.

The announcement came from Foxconn founder and chairman Terry Gou and the Maharashtra chief minister Devendra Fadnavis after signing of a memorandum of understanding over the weekend in the state capital Mumbai.

Foxconn is the world's biggest contract electronics manufacturer whose customers include Apple Inc, Blackberry Ltd, Xiaomi Corp, Samsung Electronics, Amazon Inc etc.

Prime minister Modi's ''Make in India'' campaign is aimed at wooing investors to transform the country in to a manufacturing hub and create millions of new jobs in Asia's third-largest economy. Nevertheless, there are investor concerns about the bureaucratic red tape, tax regime, land costs etc prevailing in the country.

Chief minister Fadnavis said the Foxconn plant would generate employment for about 50,000 people.

Foxconn's development will include manufacturing and research and design facilities. It is expected that the unit will be spread across about 1,500 acres of land between Mumbai and Pune.

The state industries minister Subash Desai said, ''They have not clarified, as yet, the choice of locations and the choice of products to be manufactured. In the next six months everything will be clear.''

Last week, Gou who met with prime minister Modi and other officials in Delhi had said that he was looking at setting up manufacturing units in various Indian states and possible partnerships in the world's fastest growing smartphone market.

''We are looking at a 10-year plan but there are too many barriers to overcome,'' Gou said. ''We are looking at India for the long term.''

Earlier in May, Gou said his company is aiming to develop 10-12 facilities in India, including factories and data centers, by 2020. (See: Taiwan's Foxconn to set up dozen facilities in India)

Taipai-headquartered Foxconn has its design centre in Taiwan and main manufacturing units in China with service facilities in the US, Asia and Europe. The company has been looking to diversify its manufacturing base away from China due to tax concerns and rising wages.

Foxconn, which employs over 1 million worldwide, has been engaged in controversies related to treatment of its employees. The grievances pertain to poor working conditions, insufficient overtime payment and employment of under-aged workers.

Suicides of Foxconn workers on various issues also attracted media attention, particularly in the company's manufacturing facilities in Shenzen during the period 2010-2011 (See: Apple supplier Foxconn shutters China plant after 2,000 workers riot).

In a latest incident on Friday a Foxconn employee committed suicide by jumping of a factory building in Zhengzhou.

Foxconn entered India in 2006 to manufacture for Nokia by setting up three facilities in Tamil Nadu. However, following Nokia's multi-billion dollar tax problems and its acquisition by Microsoft, Foxconn decided to shut up its facilities earlier this year due to dwindling orders, change in customer base and manufacturing requirements.

Last week, there were also reports that industrial conglomerate Adani Enterprises was in talks with Foxconn to form a joint venture manufacturing unit, though no agreement has been reached so far. (See: Adani close to JV deal with Taiwan's Foxconn)

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