GST Effect: Foxconn To Invest $5 Billion in India; India Will Be a Parallel Manufacturing Hub To China
It seems that this was only a start.
As per latest information coming in from the company, it has been revealed that the implementation of GST across India has instilled confidence within the company, and in the coming months, they have planned massive investment in India to scale up their operations.
$5 billion or Rs 34,000 crore has been earmarked for investments by Foxconn in India, and one of the strongest reasons for this is GST and the China factor.
GST Inspires Foxconn To Invest $5 Bn in India
Along with GST, Indian Govt. has announced a special 10% import duty on smartphones and their components such as chargers, headsets, batteries and USB cables, etc has acted as a ‘confidence booster’ for Foxconn.
$5 billion of investments would be now used to increase production at an ‘exponential manner’ by Foxconn.
An unnamed official from Foxconn said, “India is already high on our priority list, and we now plan to step up investments and business here by opening new factories and expanding the manufacturing footprint,”
Earlier, Foxconn, along with other companies into manufacturing was in doubt regarding investments in India, as they thought that 10% local manufacturing clause won’t be inserted into GST regime. This special 10% local manufacturing benefits had prompted several Chinese and Taiwanese manufacturing firms to open up production in India.
But now with 10% special import duty on smartphones, all doubts have been cleared.
Foxconn and other companies have realised that opening up manufacturing units in India will clearly save them 10% on overall costs, and in a cut-throat competitive market like smartphones, this can make a huge difference.
Foxconn Wants To India As Powerful As China?
Traditionally, Foxconn has had a massive presence in China.
But with Indian market opening up, under Make in India vision, and now GST, Foxconn wants to make India a powerful manufacturing hub, and make India as an alternate hub to China.
Foxconn aims to churn out close to 10 million units a year, up from 4 million right now.
The official said, “This was done as part of the preliminary investments. The big investments will happen now, and we plan to push up the manufacturing capacity to at least 10 million units per month in the first phase while having a healthy supplier eco-system.”
This clearly indicates that China is now passe`, as Foxconn along with other manufacturing companies considers India as the next superpower.
Their aim of investing $5 billion across India is to make India as powerful manufacturing hub as India.
The official said, “We want a model where we get benefits of a SEZ in a domestic tariff area. India can be a large manufacturing base, just as China.”
Will this recent announcement from Foxconn further rattle China?
We will keep you updated.