Xiaomi smartphone manucatued at Foxconn Andhra pradesh factory

An old Pepsi building in Sri City in Andhra Pradesh will soon start humming with activity again. That's where Foxconn Technology Group, the world's largest contract manufacturer, will make phones for Chinese brand Xiaomi.

Foxconn had begun work on the site across from the Tamil Nadu border two months after shutting down the third and last of its plants in that state in February. The Sri City unit won't be too big — it will make about 10,000 phones a day — but Foxconn has ambitious plans for India that could eventually make the country a key manufacturing base for the company, comparable with China.

The maker of iPhones and iPads for Apple and Kindles for Amazon is planning to set up 10-12 factories in India, each employing at least 10,000 people, with an initial investment of about $2 billion (Rs 12,700 crore) over the next five years.

The Taiwan-headquartered company, which has a client list that includes Cisco, Dell, Microsoft and Hewlett-Packard, plans to make smartphones, tablets, televisions, routers, set-top boxes and printers among other products in India, said a person aware of the strategy.

Making the iPhone in India may be some years away though as this "requires high-precision equipment and high investment, plus a larger supplier base. This could happen some years later as the first step will be assembly of phones", the person said. Despite being forced to close its plants in Tamil Nadu, the company is betting big on India.

"India is the top priority for the company, which is why Foxconn is already holding talks with various state governments," said the person cited above. Another person said the company is evaluating several states, including Andhra Pradesh, Maharashtra, Gujarat, Telangana, Karnataka and Uttar Pradesh, for establishing the factories and that a first round of meetings had been held.


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