Foxconn is eyeing to shell out up to $5 billion for mobile manufacturing in India following the implementation of Goods and Services Tax (GST) in the country. The GST imposes a 10-percent customs duty on smartphones and mobile parts such as chargers, batteries, headsets, and USB cables shipped from abroad. The new rule essentially discourages the importation of mobile phones from China, a major supplier of electronic parts for smartphones. Foxconn intends for the plan to create a parallel manufacturing hub apart from China and meet electronic demands from the United States and Europe. Interestingly, the company manufactures phones for some of the big names in the mobile phone segment, including Oppo, Xiaomi, Nokia, and Gionee. Foxconn, the largest electronics contract manufacturing firm in the world, now seeks to expand its operations in India exponentially, which would translate to increased production of electronic components for mobile devices.
Terry Gou, Foxconn chairman and chief executive officer, previously revealed the company's plan to ramp up its manufacturing operations in India, consequently creating more jobs in the country. In fact, the company is now discussing various employment opportunities with several state governments in India, including Maharashtra, Uttar Pradesh, Tamil Nadu, Haryana, and Telangana, recent reports indicate. A top official at the company was cited by Times of India in regards to a breakdown of Foxconn’s planned investment, saying that the thereof will include $3 billion for a display hub and $250 million for mechanics-related operations. Other portions of the invetment would go to the creation of lithium-ion cell factory and facilities for printed circuit boards that are used to make devices.
On top of the customs duty on phones and key components, the GST also offers benefits to local manufacturers in India. Currently, Foxconn is capable of producing up to four million devices per month in the South Asian country, a substantial volume that the official says is part of an initial investment in India. Moving forward, Foxconn intends to increase its manufacturing capacity to more than ten million units per month during the first phase of its planned investment. An update on the company's expansion efforts may follow later this summer.