Foxconn Will Build 12 Factories & Employ 10 Lakh in India; Huawei Finally Gets Approval For Manufacturing

Mainland China’s biggest private sector company Foxconn, has announced that by 2020, they will build 12 new factories and generate employment for 10 lakh workers in India. Taiwan based Foxconn, which is worth $77 billion, is world’s largest contract electronics manufacturer and is known for manufacturing iPad and iPhones.

Foxconn has said that they are witnessing a ‘huge potential’ in the manufacturing sector in India, after PM Modi’s Make in India campaign picked up steam, encouraging several global MNCs to start manufacturing in India.

Last month we had reported that Foxconn will start manufacturing Xiaomi phones at their Sri City factory in Andhra Pradesh, wherein they will produce 10,000 units per day. During that time, it was speculated that they will start 10-12 factories in India.

But with this official announcement from Foxconn, it is clear that they have some big plans for India.

In a press release shared with Financial Times, a representative of Foxconn said, “We have significant plans for India and we see huge potential in the country. This includes plans to establish 10 to 12 manufacturing facilities in the country by 2020, which would generate around 1m job opportunities.”

This announcement comes at an interesting phase, as Chinese economy is slumping to a new low, and financial experts are worrying that a Chinese recession is possible in near future. Observers are also claiming that Foxconn can possibly shift their base to India as they are experiencing labor issues and battles related with wage increase in China.

Foxconn employs around 1.2 million workers in China.

However, the company insisted that they have no plans to downsize in China, and Indian operations would be fresh.

Last month, Foxconn along with Softbank and Bharti had pledged $20 billion investments in solar power inside India.

Huawei Finally Gets Approval From Government

In another major news, China based world’s biggest telecommunication equipment maker, Huawei, finally received the green signal from the Government to set up their manufacturing unit in the country.

They had submitted their proposal way back in December 2013 to set up a unit at Special Economic Zone, Sriperumbudur in Tamil Nadu for manufacturing telecom hardware and equipment. But due to security issues, the approval was not provided.

When PM Modi visited China in May, then he had promised to expedite all pending proposals, especially related with manufacturing.

However, this approval comes with few restrictions: Huawei will have to appoint Indians for key technical positions, and in case they wish to hire a Chinese national as Chairman, Managing Director, Chief Executive Officer and Chief Financial Officer, then they will need approval from the Home Ministry.

Additionally, Department of Telecom will formulate ‘mandatory security parameters’ to implement security standards for every device manufactured & sold by Huawei in India.

Although Huawei has a unit in Chennai, it used for manufacturing optical network transmission systems only for exports (Middle East, China).

Last year, it was alleged that Huawei has hacked BSNL network and a probe was ordered into the incident. They have recently invested $170 million in Research and Development facility in Bangalore, where 3500 engineers are providing consulting to Huawei’s global clients.

This new factory in Sriperumbudur, Tamil Nadu would be their first manufacturing unit in India which will sell it’s products domestically.

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