HomeSegmentsFoxconn and Maharashtra Government in Talks to Set Up Manufacturing Facilities

Foxconn and Maharashtra Government in Talks to Set Up Manufacturing Facilities

Many foreign companies have already started manufacturing devices and other hardware components in India after the Central Government started it’s ambitious Make in India scheme. Samsung has been assembling it’s top tier handsets like the S7 in India for quite some time now. For years we have seen Apple and Foxconn show their interest in doing the same, setting up manufacturing units in the country. But due to various administrative as well as policy hurdles nothing has been finalized yet. Nokia used to operate a big plant in Chennai which has been under a controversy regarding improper taxing. The plant was later abandoned by Nokia during the Microsoft Hardware Acquisition deal and since has been a full stop.

Foxconn had also shown interest in taking over the facility from Nokia, though even there, nothing has materialized. Recently again, the buzz was back when Apple said they are in talks with the Government regarding the manufacture of iPhone in India. Foxconn is the company that assembles iPhone’s for Apple under contract and has been doing so for years in China.

A few days back, Maharashtra Chief Minister Devendra Fadnavis held discussions with Simon CP Hsing, Vincent Huang of Foxconn for setting up manufacturing facilities in the state. After the meeting, the minister announced that Foxconn had confirmed its commintment to the area, despite some significant delays in selecting a parcel of land.
The original commitment, made in early 2016, was reportedly for a 1,200-acre plot of land in Maharashtra, on top of which would be built a manufacturing plant serving Foxconn’s clients, including Apple. From the time a deal legitimately starts, sources estimate it will be about 18 months before the facility is operational.

 

Apple’s requests to the India government include a 15-year tax holiday on imported components and equipment, as well as a waiver on customs duties for the latter whether new or used. And though this sound too sweet of a deal, today reports have emerged that the State Government offered to offset Foxconn’s import duty burden. The state government has offered to compensate the Taiwanese company the 11.5 % import duty levied by the Centre.

Those in the know said that the state was forced to give this assurance as Foxconn was reluctant to fund the setting up of a manufacturing facility in Maharashtra, or for that matter, anywhere in India unless the government charged import duties that were cheaper than the duties in China.

While Foxconn is negotiating with the Government, Apple has reportedly sourced in Wistron to manufacture the iPhone locally in India. Wistron is another company like Foxconn, who assembles iPhone’s for Apple under contract. Also according to the new report, the Bangalore plant will start construction in April, and may produce a new iPhone model.

At present, Apple has no manufacturing capacity in India. Manufacturing partner Foxconn has facilities in the country, but they are not currently building Apple products nor do they appear equipped to do so at present, but that may change in 2017.

References:

Rumored new Foxconn iPhone plant in India lurches forward, timetable for opening unknown

Assembly company Wistron looking to expand India factories, possibly for future iPhone construction

Maharashtra offers to offset Foxconn’s import duty burden 

Foxconn nears deal to build iPhone manufacturing plant in India, report says

Foxconn submits preliminary plan to revive Nokia unit in Chennai
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