The Taiwan press is reporting today that late Saturday news broke that the Foxconn Technology Group would soon be investing in three new production plants in India that could be used in part to assemble iPhones for Apple.
The report noted that Foxconn, also known as Hon Hai in Taiwan, was planning production facilities in Gujarat and Uttar Pradesh provinces and a trial unit geared toward R&D and new product development in Andhra Pradesh.
An unidentified source told the paper that booming smartphone sales have encouraged Foxconn, which is Apple's biggest contractor for phone production, to produce Apple smartphones in India even though its most recent venture for making Nokia phones ended in failure over labor disputes which drew ire of some 1,700 employees who were laid off.
The announcement of Foxconn's expansion plans came on the heels of the Indian government's "Make In India" initiative aimed at making doing business in the country easier.
A source was quoted saying that "While policy announcements of 'Make In India' are not imperative for Foxconn's investments for smartphone making plants, a favorable manufacturing policy will help greater commitment for future investments."
Last February we reported that an Indian report published by the Business Standard in New Delhi, stated that Apple had asked the Indian government "to relax the local sourcing clause in its policy on foreign direct investment (FDI) in single-brand retail. Though government officials seem to have ruled this out for now, the proposal has not yet been closed."
If Apple, via Foxconn, can open an iPhone assembly plant (or more) in India, it could give Apple the added benefit of being able to open a number of flagship Apple Stores that could begin a greater push into India.
We reported last month that mobile handset revenues will grow +6% worldwide during 2015. At the same time, the four BRIC countries combined – Brazil Russia, India, and China – will all grow at rates well above the global average and will generate 36% of global handset revenues in 2015.
Whether Foxconn is able to successfully open major plants in Brazil and India simultaneously is unknown at this time. However, with Foxconn/Hon Hai posting their highest ever profits in Q1 due to the iPhone 6, they certainly have the incentive to keep their success on a roll.