Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics manufacturer by revenue, has agreed to invest US$5 billion in a new plant in the western Indian state of Maharashtra, a government official said on Saturday, in a major boost for Indian Prime Minister Narendra Modi.
Hon Hai, known as Foxconn Technology Group (富士康), is a major Apple Inc supplier. The company also assembles products for Sony Corp, Nokia Oyj, Hewlett-Packard Co and Xiaomi Corp (小米).
Hon Hai chairman Terry Gou (郭台銘) signed a memorandum of understanding with Maharashtra Chief Minister Devendra Fadnavis in India’s financial capital of Mumbai.
“Extremely elated to witness the signing of 5 billion dollar MoU between GoM [government of Maharashtra] & Foxconn with employment generation of 50,000,” Fadnavis wrote on Twitter.
The investment on the new manufacturing facility is to take place over five years.
Setting up a facility in India could help cut Hon Hai’s labor costs and boost sales of the iPhone in a country that boasts 952 million mobile connections.
In June, Maharashtra Minister of Industries, Ports, Employment and Self-Employment Subhash Desai told reporters that Hon Hai was in talks with the Indian government to build a plant in the state, as business-friendly Modi seeks to boost foreign investment in Asia’s third-largest economy.
Desai had said local officials had pitched several possible sites to the Taiwanese technology giant.
Modi swept to power at elections in May last year, pledging to attract overseas businesses to the country as he promised to inject life into a stuttering economy.
He later launched his “Make in India” campaign, which aimed to send a message to the world that India was open for business.
On Tuesday last week, Gou held a news conference in New Delhi, saying that the company has big investment plans for India over the next decade to produce mobile devices, televisions, electronic products, batteries and key electronic components, if the government addresses infrastructure deficiencies.
“The government needs to improve infrastructure,” Gou said, citing issues such as electricity and transport.
Gou was in India for a three-day visit last week and made a two-and-a-half-hour presentation on Monday night after a dinner meeting with Modi.
Additional reporting by staff writer
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