Foxconn revives Odisha plan for mobile manufacturing after two-year gap

Back in June 2016, Foxconn was eyeing a coastal site in the state to make cellular handsets. The plan did not take off as company officials did not engage with state govt

Taiwanese multinational Foxconn has restarted discussions, after a gap of two years, with the Odisha government for setting up a mobile manufacturing facility in the state. The world’s largest electronics contract manufacturing firm, known for assembling iPhones, is yet to specify the proposed investment size or manufacturing plans.

It is learnt that Foxconn top executives had a meeting with Odisha Principal Secretary (industries) Sanjeev Chopra recently. A source indicated the state is exploring the possibility of setting up manufacturing units for cell phones and other IT gadgets. Chopra was not immediately available for comment. Foxconn did not respond to Business Standard queries.

In 2015, Foxconn had signed an MoU with the Maharashtra government, pledging $5 billion investment for an electronics manufacturing plant in the state. The company had promised to create 50,000 jobs by 2020 in connection with the Maharashtra plant.  The ambitious project, however, has not taken off yet. 

Foxconn’s India operations are currently in Andhra Pradesh and Tamil Nadu, focused on making Xiaomi and Nokia branded handsets, respectively. 

It was in June 2016 when Foxconn identified a coastal site in Odisha to manufacture cellular handsets. But it remained an idea at that point.

Following the recent revival of talks, a delegation from the Odisha government is likely to visit Foxconn’s Chennai facility to study the ecosystem there. The visiting team would make an assessment of the best  incentives that can be made available to Foxconn for installing a plant in Odisha.

The state government expects Foxconn to make announcements related to its investment plans at the Make in Odisha summit to be held in Bhubaneswar from November 11 to 15. Government officials, however, pointed out that they were apprehensive of other options being weighed by Foxconn.

“Based on initial talks, we are counting Foxconn as the third potential investor in mobile manufacturing domain in Odisha. We have got two proposals from investors who are open to put up their units at the electronics manufacturing cluster (EMC). But we know Foxconn is visiting other states and evaluating its options,” said a source familiar with the development.

Leading distributor of mobile phones and accessories, StarGSM Cellular India Pvt Ltd, has shown interest in setting up a mobile manufacturing unit in Odisha. StarGSM will make mobiles along with chargers and power banks at the EMC (electronics manufacturing cluster) proposed at Info Valley, a dedicated park of IT companies located in the outskirts of Bhubaneswar. Kolkata-based Rashmi Group, too, is in talks with the state government for setting up a mobile manufacturing unit at the EMC.

The state government has already declared a special incentive package scheme to attract investments in electronics by giving additional incentives on capital investment subsidy, human capital investment subsidy, power incentives, water incentives and interest subsidy over and above the promises made in its Information and Communications Technology Policy-2014.
 

Foxconn’s India story
 
2015
May: Starts smartphone assembly unit at Sri City, Andhra Pradesh
Aug: Signs MoU with Maharashtra govt for electronics manufacturing plant worth $5 bn
 
2016
June: Considers a site on Odisha coast for a mobile phone making unit
Oct: Foxconn, Nokia agree to revive Chennai plant
 
2017
Mar: China’s handset vendor Xiaomi partners Foxconn for a second unit at Sri City
 
2018
Feb:Foxconn says it is committed to $5billion investment in Maharashtra
Sep: Foxconn International’s MD meets top Odisha officials