Foxconn is set to invest $700 million to set up a new manufacturing plant in Karnataka, India, and it is one of the largest iPhone manufacturing suppliers of Apple. The new site for the supplier in India will be 300 acres.
The site will be built in Bengaluru, the capital of the state of Karnataka. It is the eighth-largest state in India by area and the sixth-largest by population. It is a major hub for the software industry, with many multinational technology companies having their headquarters or major operations based in the state.
Young Liu, Chairman of Foxconn, met with the prime minister of India, Narendra Modi, to discuss the investment. Prime Minister Modi tweeted “Had a good meeting with Mr. Young Liu. Our discussions covered various topics aimed at enhancing India’s tech and innovation ecosystem.”
This move comes with no surprise as Foxconn and other American tech manufacturers are looking to move away from China due to political unrest between China and the USA. Other than the political situation, other reasons to move away from China could be related to the lower labor costs in India which make India a very attractive location for production. India also offers tax breaks and incentives to foreign investors.
This investment will create 100,000 new jobs in India. In February 2023, the unemployment rate in India keeps going up and stands at 7.45%, according to CMIE India. The new jobs will surely help India’s economic activity, especially in the state of Karnataka. Karnataka is already one of the most economically developed states in India. Additionally, the state ranks 5th in all of India and has an expected GDP of $240 billion in 2022-2023. The establishment of a new manufacturing plant in the state is likely to have a positive impact on its economic growth and development.
Continued political unrest and changing labor laws in China will drive more American manufacturers towards countries with skilled but cheap labor, like India. This move by Apple and Foxconn is likely to be the first of many as companies look to reduce their reliance on China and seek new opportunities in other regions.
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