iPhone maker Foxconn to invest $5 billion in Maharashtra

Foxconn Technology, the world's largest contract electronics manufacturer and a key supplier to Apple Inc, has signed a pact with Maharashtra to invest $5 billion over five years on a new electronics manufacturing facility.

The announcement was made on Saturday by Foxconn founder Terry Gou and Maharashtra Chief Minister Devendra Fadnavis after the signing of an accord in Mumbai.

Gou said the facility in Maharashtra will focus on research and development as well as manufacturing, declining, however, to say if the unit would make mobile phones. He said the company chose the state for being a financial centre, availability of quality talent and software-hardware integration facilities. Maharashtra has given the company 1,500 acres land for the plant.

Gou said Foxconn, the trade name for Hon Hai Precision Industry Co, which also counts Blackberry, Xiaomi and Amazon as clients, was looking for local partners for the facility in the state.

"Foxconn will create direct employment of 50,000 people through this MoU," Fadnavis said.

The announcement will bolster Prime Minister Narendra Modi's "Make in India" campaign, which aims to turn Asia's third-largest economy into a manufacturing powerhouse.

Gou had said in New Delhi on Tuesday that he was looking at setting up manufacturing units in various Indian states and possible partnerships in the world's fastest growing smartphone market. He had said in May that Foxconn was aiming to develop 10-12 facilities in India, including factories and data centres, by 2020.

Foxconn employs about 1.3 million people during peak production times, making it one of the largest private employers in the world. But it has had to improve labour conditions following a series of suicides in 2010-2011, mostly at its Shenzhen manufacturing operation.

The company on Friday confirmed the death of an employee at its Zhengzhou plant in China which a labour group said was suicide.

India could help Foxconn mitigate accelerating wage inflation in China, where it makes the majority of iPhones, and base production sites closer to markets where its key clients want to grow.

Local businessmen are hoping that as Foxconn and other companies invest in the country, suppliers will follow.

Gou said the MoU between Foxconn and the state government for setting up the plant follows two months of active discussions during which he met the Chief Minister seven times and a team of 60-70 persons from Foxconn was working on this.