Apple partner Foxconn plans $700m iPhone factory in Karnataka to boost local production and shift from China

Apple partner Foxconn Technology Group plans to invest around $700 million (about Rs 5,763 crore) in a new factory in India to ramp up local production, people familiar with the matter said, pointing to a move accelerated manufacturing away from China as Washington-Beijing tensions grow.

The Taiwanese company, also known for its flagship unit Hon Hai Precision Industry Co., plans to build the iPhone parts manufacturing plant on a 300-acre site near the airport in Bengaluru, the state capital. South Karnataka Indian, according to people, who asked not to be named because the information is not public. The factory could also assemble Apple’s handsets, some people said, and Foxconn could also use the site to produce some parts for its fledgling electric vehicle business.

The investment is one of Foxconn’s biggest outlays to date in India and underscores how China stands to lose its status as the world’s top producer of consumer electronics. Apple and other US brands are relying on their China-based suppliers to explore alternative destinations such as India and Vietnam. It’s an overhaul of the global supply chain that accelerated during the pandemic and the war in Ukraine and could reshape the way global electronics are made.

The new production site in India is expected to create around 100,000 jobs, the sources said. The company’s sprawling iPhone assembly complex in the Chinese city of Zhengzhou currently employs some 200,000 people, although that number increases during the peak production season.

Production at the Zhengzhou factory plunged ahead of the holiday season due to Covid-related disruptions, prompting Apple to re-examine its China-reliant supply chain. Foxconn’s move is the latest move that suggests suppliers could move capacity out of China much faster than expected.

Plans could still change as Foxconn is finalizing investment and project details, the people said. It’s also unclear whether the plant represents new capacity or production that Foxconn is moving from other sites such as its Chinese facilities.

Apple declined to comment. Hon Hai, whose chairman Young Liu met with Indian Prime Minister Narendra Modi this week, did not immediately respond to an email seeking comment. The Karnataka state government also did not immediately respond. Liu, who is on tour in India, has embarked on another manufacturing project in the neighboring state of Telangana.

Foxconn’s move would be a coup for Modi’s government, which sees an opportunity to bridge the tech gap between India and China as Western investors and companies wary of Beijing’s crackdown on the sector private.

India has offered financial incentives to Apple suppliers such as Foxconn, which started manufacturing the latest generation of iPhones at a site in Tamil Nadu last year. Smaller rivals Wistron Corp. and Pegatron Corp. have also ramped up in India, as vendors such as Jabil Inc. have begun manufacturing components for AirPods locally.

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