Foxconn signals India’s entry into electronics manufacturing
New Delhi has already earmarked billions of dollars in incentives to attract phone, semiconductor and electric-vehicle manufacturers to the country. India is also having some success moving up the value chain, albeit from a very low base.
The local share of total value added for mobile phones assembled in India rose to 15% in 2022 from 11% in 2019. The firm expects that to cross 20% in another two-three years.
Close to 6.3% of iPhones shipped globally in 2022 were manufactured in India, according data from tech consulting firm Canalys. Nearly all smartphones sold in India in the third quarter of last year were made locally, according to Counterpoint. Still, a closer look at India’s electronics trade data shows how far the nation has to go if it hopes to rival China one day. India’s electronics exports grew 45% to $20.45 billion in 2022, while imports rose just 19%, figures from data provider CEIC show. But the country is still running a monthly electronics trade deficit of around $4 billion. And China exported about $30 billion of computers and mobile phones in December 2022 alone. Moreover, in the electronic component space, progress is less obvious—India’s exports of components rose 29% in 2022 to $3.7 billion, while imports increased 26% to $27 billion. And many of those come from China.
Even so, the world’s second-most populous nation has obvious attractions for the labor-hungry Apple supply chain. Challenges such as often-inadequate infrastructure remain daunting. But a big vote of confidence from Foxconn could go a long way toward persuading other manufacturers to take a closer look too. The announcement follows a meeting between Foxconn Chairman Young Liu and Telangana chief minister K Chandrasekhar Rao. Liu, who is on a tour of India, also met with Prime Minister Narendra Modi earlier this month.
Foxconn’s investment is the largest in India’s electronics sector and will create 100,000 jobs, Rao’s office said. The state government and Foxconn didn’t disclose the size of the contract manufacturer’s investment or specify products that it would make in the state. (www.wsj.com)