India as next manufacturing hub? Foxconn starts making Xiaomi phones in the country, to up capacity

Foxconn Technology Group has started making and shipping its first smartphones for China’s Xiaomi and American phone brand InFocus out of its new plant in Andhra Pradesh, as it takes a step forward towards making India its next manufacturing hub.

The world’s largest contract manufacturer will ramp up production capacities of the plant, located in 7,000-acre Sri City special economic zone in the state, and will bring it at par with its manufacturing units in other countries, Vincent WH Tong, chairman of FIH Mobile, Foxconn's phone manufacturing unit, told ET.

“It (manufacturing) has just started and is moving as we speak. Actually, compared to our capacities elsewhere, it is not that bid a scale. In the long run we intend to grow the facility further,” he said, but declined to comment on the quantities of mobile phones being made from the factory for Xiaomi and InFocus.

ET had reported in its June 24 edition that the Sri City unit – called Rising Star – will make about 10,000 phones a day, which is fairly small compared to Foxconn’s much larger units in China. It has been set up at an investment of Rs 77 crore.

Tong added that the company was talking to multiple customers to make from the same facility, without sharing names of possible clients.

Chinese smartphone leader Xiaomi has publicly shared its plans to make phones from India but India head Manu Jain said that the company was still finalizing its manufacturing plans when asked whether it was getting smartphones made from Foxconn’s new unit.

US based InFocus has started selling its M330 model priced at Rs 9,999 in India in March, through an exclusive partnership with Snapdeal. The company spokesperson wasn’t immediately available for comments.

The maker of iPhones and iPads for Apple and Kindles for aiming to create at least a million jobs by setting up 10-12 manufacturing facilities in across the country by 2020, Foxconn chairman Terry Gou had said during his recent visit to India. The company plans to start from five states including Andhra Pradesh, Gujarat, and Maharashtra and expand to other states through the decade.

"We're looking at investing into India in a significant way, but the policy to Make in India needs to be quite aggressive in order for the true supply chain to come to India,” he said. The top executive who was in India along with Foxconn chairman Terry Gou on a four day visit to multiple cities including Delhi, Mumbai and Bangalore, said that India figured in Foxconn’s plans for the long run.

“Purely assembly does not have the element of scale, development and engineering, and it will have a limited impact for the economy. We're looking to Central and state governments alike, to put out some encouraging policies for people like us to Make in India,” Tong added.

The Taiwan-based firm, also known as Hon Hai Group, that has a client list that includes Cisco, Dell, Microsoft and Hewlett-Packard, plans to make mobile handsets, tablets, TVs electronic products, batteries and key electronic components, routers, set-top boxes and printers among other products in India.

It also plans to set up including data centers and incubators in cities like Delhi, Mumbai, Bengaluru, and Hyderabad. The company is also looking to invest in Indian internet start-ups, small-medium enterprises and handset makers. Foxconn will also set up an India focused venture fund as a part of its plans to invest and partner with start-ups and e-commerce companies.