Foxconn plans $700-million iPhone unit in Bengaluru | The Financial Express

Foxconn plans $700-million iPhone unit in Bengaluru

Under the PLI scheme, smartphone exports from India has crossed the Rs 60,000-crore mark during April-December of the current fiscal.

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The new plant will come up near the Bengaluru international airport, in Doddaballapura and Devanahalli taluks, the Karnataka government said in a statement.

Apple will be strengthening its production base in the country, with key contract manufacturer Foxconn setting up a new factory in Bengaluru on 300 acres. Karnataka chief minister Basavaraj Bommai said the new plant, which will make iPhones, will also create 100,000 jobs.

Though neither the state government nor Foxconn disclosed the investment amount, industry sources said it will entail an investment of $700 million. The new plant will come up near the Bengaluru international airport, in Doddaballapura and Devanahalli taluks, the Karnataka government said in a statement.

Foxconn currently manufactures iPhones in Tamil Nadu under the production-linked incentive (PLI) scheme. Two other contract manufacturers of Apple make iPhones in India under the PLI scheme: Pegatron in Tamil Nadu and Wistron in Karnataka.

Under the PLI scheme, smartphone exports from India has crossed the Rs 60,000-crore mark during April-December of the current fiscal. This is 100% higher than exports during the same period last year and 33% higher than those registered during the entire FY22 at Rs 45,000 crore. Apple has contributed nearly 50% of the Rs 60,000-crore exports thus far. Projections are that exports for the full FY23 will cross the Rs 75,000-crore mark.

Apple has expanded its exports in a phased manner, hitting the $1-billion mark for the April-August 2022 period. It then increased its exports to an average of $0.5 billion each month from September to November 2022, finally accelerating to nearly $1 billion of iPhone exports in December 2022.

The smartphone PLI scheme was the first and the largest of the 14 PLI schemes announced by the government, which has allocated an outlay of Rs 40,995 crore towards it. This is nearly 20% of the total Rs 2 trillion across all 14 PLI schemes.

Smartphone exports constituted approximately 35% of the total electronics exports of $15.1 billion during FY22. By contrast, in the first nine months of the current fiscal, smartphone exports constitute nearly 45% of the total electronics exports of $16.7 billion.

According to India Cellular and Electronics Association, the industry association of mobile manufacturers, smartphone exports will contribute close to 50% of the total electronics exports at the end of the current financial year. Industry estimates are that mobile manufacturing will contribute nearly 40% of the $300 billion electronics manufacturing by 2026 and nearly 50% of the $120 billion exports. At the end of the current fiscal, electronics exports are expected to reach closer to $20 billion and mobile exports will likely cross $9 billion.

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First published on: 04-03-2023 at 05:45 IST
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