Foxconn set to start mass producing iPhones in India

Move will cut manufacturer's reliance on China and help Apple's retail push in India

TAIPEI/BANGALORE • Foxconn chairman Terry Gou said the iPhone will go into mass production in India this year, a shift for the largest assembler of Apple's handsets that has long concentrated production in China.

Mr Gou said Prime Minister Narendra Modi has invited him to India as his Taiwanese company plans its expansion in the country.

Apple has had older phones produced at a plant in Bangalore for several years, but now will expand manufacturing to more recent models.

Bloomberg News reported this month that Foxconn is ready to start trial production of the latest iPhones in the country before it starts full-scale assembly at its factory outside the southern city of Chennai.

India has become the fastest-growing smartphone market in the world, while China stagnates and Apple loses share to local competitors such as Huawei Technologies and Xiaomi. Apple has been a minor player in India, in part because of its high prices, but local manufacturing would help the company avoid import duties of 20 per cent.

"In the future, we will play a very important role in India's smartphone industry," Mr Gou said at an event in Taiwan. "We have moved our production lines there."

He also said yesterday he plans to step back from daily operations to focus on broader strategy. But he is not stepping down or relinquishing his chairmanship, said Mr Louis Woo, special assistant to Mr Gou.

Apple has been a minor player in India, in part because of its high prices, but local manufacturing would help the company avoid import duties of 20 per cent.

It is not yet clear how Apple's steps into India will affect its China operations. China has been the company's most important manufacturing base for years, home to Foxconn's biggest facilities and hundreds of other partners.

Foxconn already has two assembly sites, in Andhra Pradesh and Tamil Nadu, where it makes devices for Xiaomi and Nokia.

 
 
 

Locating more production in India would help diversify Apple and Foxconn's manufacturing footprint away from China amid ongoing trade tensions with the US.

The Indian assembly line of Foxconn's Hon Hai Precision Industry would serve local and export markets by the time Apple announces its next iPhone models in September, people familiar with the matter have said.

The Taiwanese contract manufacturer, the biggest maker of iPhones, will initially invest about US$300 million (S$406 million) to set up for Apple with investments to ramp up as capacity expands, they said.

Producing phones locally would also help Apple's retail push in India. The company needs to meet a 30 per cent local sourcing rule to be able to open its own stores there.

Indians bought more than 140 million smartphones last year, with just 1.7 million sold by Apple, as consumers favoured cheaper models from China.

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A version of this article appeared in the print edition of The Straits Times on April 16, 2019, with the headline 'Foxconn set to start mass producing iPhones in India'. Print Edition | Subscribe