Foxconn and the Indian state of Maharashtra have announced a relationship that will see the contract manufacturing company spend up to US$5 billion on a colossal manufacturing complex.
In a deal announced on Saturday by Maharashtra chief minister Devendra Fadnavis and Foxconn (known as Hon Hai in its Taiwan home ) founder and chairman of Terry Gou, it was revealed that the state will provide 1,500 acres of land for Foxconn to use. Facilities will be constructed over five years and are expected to include research and development facilities as well as factories.
India was chosen for an R&D role because of the skills of local workers, but the move to India is motivated by other factors too. One is undoubtedly the “Make in India” policy India's government is using to lure manufacturers to the nation and to improve local manufacturing practices. Make in India is both an economic development policy and a way for India to point out that there are easy ways to access its growing domestic market.
Wage growth in China may be another factor in Foxconn's thinking, as may China's increasing preference for joint ventures on its soil. Beijing's military posturing in the South China Sea also has diplomatic types pondering the wisdom of having all one's manufacturing eggs in a Middle Kingdom basket. Indian facilities may be a few more sea-days from the USA, but aren't horribly out of the way.
Foxconn says it should be up and running in Maharashtra within five years and will create 50,000 jobs in the region. ®