Apple has got the government’s clearance for denotifying 40 acres inside Foxconn plant premises near Chennai, which would allow the company to ramp up production for the domestic market.
“The expansion has been on the cards. A portion of their premises has been denotified to ramp up production, for which they need to increase their workforce,” said a person directly aware of developments at the Taiwanese phone factory.
Companies that operate in special economic zones (SEZs) can produce for the local market by applying for denotification of portions of their factory as domestic tariff area (DTA).
The company has also accelerated its drive to reopen hostels after all of them were shuttered post a food-poisoning incident late last year. Now, a little over 10,000 of the total 15,000 workers have returned to the company-provided accommodations.
State government officials aware of Foxconn’s reopening drive said almost all hostels, except those that Foxconn opted not to open now, have been made functional.
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“By May first week, Foxconn should be able to have its total workforce back at the hostels,” said an official aware of Foxconn’s workforce at the plant.
The official added that Foxconn was building a large hostel at Vallam where the company plans to house its employees.
Mails sent to Apple and Foxconn remained unanswered as of press time Monday.
ET had reported earlier this week that Apple has
started production of its high-end iPhone 13 in India at Foxconn’s plant to help deepen the US smartphone major’s presence in India.
Foxconn’s interest to scale up investments in India is in line with other Taiwanese companies that are eyeing other Southeast Asian countries, apart from China, to expand their manufacturing footprint, foreign policy expert Sana Hashmi told ET.
Maharashtra offers to offset Foxconn’s import duty burden
“India is part of Taiwan’s new southbound policy,” she said. “The current lockdown in China is definitely hurting Taiwanese companies but the tension between China and Taiwan is the larger issue.”
protests broke out late last year over concerns about living conditions at Foxconn’s hostels, the state government had mandated a procedure for the phased reopening of the hostels.
“Foxconn has to show hostels to local administration and get authorisation before reopening them, which are across three districts – Kanchipuram, Thiruvallur, and Chengalpet,” said a state government official who did not wish to be named. “The collectors of these districts then dispatch officers to visit, check hostels and then give authorisation, and then the hostels are reopened.”
Foxconn resumes operations at Tamil Nadu plant
These hostels have been redone to include additions such as more bathrooms, bunk beds in every room, reduced number of occupants per room, drinking water dispensers, first-aid kits, CCTV cameras, and facilities for entertainment including TVs and games like carrom, chess, volleyball.
Foxconn’s DTA approval to sell in the domestic market comes at a time when smartphone shipments have been growing steadily despite component supply constraints last year.
According to IDC research data, Indian smartphone shipments stood at 161 million in 2021, up 7% from the previous year. Chinese company Xiaomi shipped 40.4 million phones, holding a little over a fourth of the market. South Korean competitor Samsung came in second at 27.9 million phones and 17.4% market share.
Another Foxconn unit,
Bharat FIH, which has filed for an IPO to list its shares on Indian exchanges, makes Xiaomi phones at its plant near Chennai.
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