SUMMARY
The Karnataka government will hand over 300 acres of land and other infrastructure facilities to the company by July 1
The project is slated to entail an investment of $1.7 Bn and will create 50,000 jobs in the region
The development comes at a time when Apple has scaled up its investments in the country as it looks to diversify its production outside of China
After months of back and forth, Apple vendor Foxconn will commence manufacturing iPhones at its upcoming facility in Karnataka’s Devanahalli by April 2024.
The announcement came after the state’s IT Minister Priyank Kharge and minister for large and medium industries MB Patil met Foxconn executives on Thursday (June 1).
The Karnataka government will hand over the 300-acre land and other infrastructure facilities to the company by July 1. In addition, the project is slated to entail an investment of $1.7 Bn (INR 13,000 Cr) and create 50,000 jobs in the area, as per Kharge. The upcoming facility will be able to produce up to 2 Cr iPhones annually.
“Assuring investors and industry captains that Karnataka will provide a conducive environment for business was (the) need of the hour. Foxconn investment of $1.7 Bn will pave way for more business and restore the State’s status as the #1 destination,” Kharge tweeted.
State minister MB Patil added, “The government would ensure providing water, quality power supply, road connectivity, and other infrastructure facilities to facilitate the manufacturing process.”
Meanwhile, the project is slated to be completed in three phases. While the construction is yet to begin, Foxconn, as per Patil, has already reportedly paid 30% of the cost towards the land (INR 90 Cr) to the Karnataka Industrial Areas Development Board.
This comes a couple of months after it was reported that Foxconn was looking to invest anywhere between $700 Mn to $1 Bn to establish a manufacturing facility on the outskirts of Bengaluru.
The move is expected to create jobs in the vicinity and will give a major boost to the industrial infrastructure in the area.
This comes amid a flurry of investments by Foxconn in the country. Just weeks ago, Foxconn conducted the inception ceremony for its manufacturing facility in Telangana’s Kongar Kalaan. The investment for the Telangana facility was pegged at well over $500 Mn and is expected to create 25,000 direct jobs in the state.
In April, it was also reported that Foxconn was mulling shoring up its existing manufacturing plant on the outskirts of Chennai in Sriperumbudur. The Apple vendor was said to be looking at adding two new buildings to manufacture iPhones.
The development comes at a time when Apple has scaled up its investments in the country as it looks to diversify its production outside of China. The move to India has largely been driven by the ongoing geo-political standoff between the US and China as well as attractive production-linked incentives (PLIs) offered by the Indian government.
This has seen a clutch of Apple’s suppliers make a beeline for India. While Jabil Inc. recently began manufacturing AirPods components, Salcomp also began scaling up its manufacturing capacity in the country. Apart from these two players, the larger Apple ecosystem also comprises contract manufacturers such as Pegatron, Wistron, Tatas and Avery.
The pivot to India has led to a major spurt in the production of iPhones in India. Apple tripled the production of its smartphones in the country to $7 Bn in the financial year 2022-23 (FY23).
The move also coincides with Xiaomi announcing that it will produce wireless audio products and manufacture smartphones, in partnership with Dixon, in the country. With Foxconn further scaling its investments, it remains to be seen how the investment pans out for the entire local ecosystem.
