Foxconn announces $5bn India investment

Little over half a year after the firm announced plans to suspend its India operations, the world’s number one contract electronics manufacturer has signed an agreement with India’s Maharashta state to invest $5bn in electronics manufacturing over the next five years. The deal marks one of the largest corporate FDI deals in the country’s history and should hand India’s burgeoning electronics manufacturing industry a much-needed pick-me-up.

India’s failure to improve its labour regulations and crumbling infrastructure have handed its manufacturing ambitions a knock or two

The new facility will include both a manufacturing and research and development unit, and should serve to create an additional 50,000 jobs. Perched between Mumbai and Pune, the facility will be the first of many to grace India in the coming years.

Put out by rising wages in China, where it makes iPhones and iPads, the country’s leading private employer is once again eyeing India’s low-cost opportunities in the hope that it might establish as many as a dozen new manufacturing facilities before 2020. This new electronics manufacturing facility also feeds into the Prime Minister’s “Make in India” campaign, through which he aims to transform the country into a manufacturing powerhouse. The expectation now is that suppliers will follow suit and speed India’s transition to world-beating manufacturer.

India’s failure to improve its labour regulations and crumbling infrastructure have handed its manufacturing ambitions a knock or two, yet Foxconn’s commitment to the country’s manufacturing drive will do much to boost confidence in the country’s growing stature. The company’s founder Terry Gou has stated previously that he plans to make India a key export hub for electronics, spearheaded by this first of many facilities, yet there is a great deal to be done before India matches up to rivals such as China.