Taiwan-based Hon Hai Precision Industry Co., the major maker of Apple’s iPhones, has invested $1.5 billion (roughly Rs. 12,450 crores) in its unit in India. The move is seen as a major step towards expanding production outside China. The company gave this information in an exchange filing on Monday, stating that the investment has been made through a Singapore-based subsidiary.
Hon Hai, also known as Foxconn, is building new plants in South India and increasing production capacity. This investment is expected to further accelerate the production of Apple’s iPhones in India. The company has not yet made any official statement in this regard, but it is clear that Apple wants to develop India as a major manufacturing hub to reduce its dependence on China.
Apple plans to import most of the iPhones sold in the US from India by the end of next year. Earlier, US President Donald Trump had asked Apple CEO Tim Cook to avoid building new plants in India. Despite Trump’s statement, Apple has not changed its strategy. In fact, Apple is pushing to increase production in countries other than China to reduce the risks of tariffs and geopolitical tensions.
Currently, most of Apple’s iPhones are made in China, while it has no smartphone production in the US. However, as reported to NBC news, the company has promised to hire more employees in the US and invest $500 billion domestically over the next four years with intentions to hire 20,000 new workers and produce AI servers. Along with this, Hon Hai is also increasing its investment in the US to reduce geopolitical risks.
Most of the iPhones made in India are assembled at Hon Hai’s plant in South India. Apart from this, Tata Group’s electronics manufacturing unit, which has bought Wistron Corp.’s Indian business and is handling Pegatron Corp.’s Indian operations, has also emerged as a major supplier for Apple.
Apple’s iPhone production in India has increased significantly in the last one year. According to a Bloomberg report, in the 12 months till March, iPhones worth $22 billion were assembled in India, which is about 60% more than the previous year. This figure clearly shows that India is becoming an important manufacturing hub for Apple.
This investment by Hon Hai will not only increase employment opportunities in India, but will also help establish the country as a global electronics manufacturing hub. This will give further impetus to the government’s ‘Make in India’ initiative, as well as open the way for other global companies to invest in India.
This investment will also benefit the local supply chain, as Apple and its affiliates will have to rely on Indian vendors for the supply of components. This will strengthen the electronics manufacturing ecosystem in the country and India will move towards becoming the ‘factory of the world’.
If this strategy of Apple and Hon Hai is successful, then in the future India can become a major exporter not only for iPhones, but also for other high-quality electronic products. This investment will definitely prove to be a big economic opportunity for India.
