Taiwan's Foxconn to invest $5bn in India Manufacturing facility in Maharashtra is one of the largest FDI deals in Indian corporate history
19 HOURS AGO by: James Crabtree in Mumbai FINANCIAL TIMES LONDON
Taiwanese electronics maker Foxconn will invest about $5bn over the next 5 years to build a manufacturing facility in the western Indian state of Maharashtra, marking one of the largest foreign direct investment deals in Indian corporate history.
Terry Gou, Foxconn founder, signed a memorandum of understanding to develop the new facility following a meeting with Devendra Fadnavis, Maharashtra's chief minister, at the weekend in Mumbai, the state's capital.
The deal provides the first clear indication of the scale of Foxconn's investment plans in India, as the contract maker of Apples's iPhone and iPads looks to diversify away from its main Chinese operations.
In July, Foxconn confirmed that it planned to establish as many as a dozen new manufacturing facilities in India employing up to 1m workers, as the company grapples with rising wage costs in China, where it is the largest private sector employer. News of the size of its plans in Maharashtra, which are also set to include research and development facilities, will provide a further boost to Prime Minister Narendra Modi's "Make in India" campaign to tempt large-scale labour-intensive manufacturing companies away from countries in east Asia.
As the world's largest contract manufacturer of electronic goods such as smartphones and tablets, Foxconn's decision to ramp up its presence carries huge symbolic significance in India. Indian politicians have talked for years about developing a Chinese-style manufacturing economy, in part to provide jobs to millions of young workers who enter the labour market each year. But shedding the country's reputation as a manufacturing laggard has proved tricky, with manufacturing groups continuing to complain of arduous labour rules and subpar infrastructure.
Foxconn's announcement also provides a fillip to the economy of Maharashtra, which is one of India's most important manufacturing states, and which last month won a further $1bn investment deal from US-based automaker GM to enlarge an existing factory close to Pune. Mr Fadnavis said on Saturday that Foxconn, which is also known as Hon Hai Precision Industries, had agreed to invest about $5bn in a facility located between Mumbai and the industrial city of Pune, creating 50,000 jobs.
Foxconn said the agreement "outlines significant investments that Foxconn intends to make in the next five years to establish manufacturing, research and development, and other strategic capabilities" at its new facility. The Maharashtra plant is only one component of the Taiwanese company's plans, which have seen Mr Gou shuttling around India over recent weeks conducting negotiations with state governments and potential partners.
Last week the Adani group, a major Indian industrial conglomerates led by billionaire Gautam Adani, said that it had also been in talks with Foxconn to establish a joint venture. Analysts say this would likely involve a facility in Adan's export-focused special economic zone in the western Indian coastal state of Gujarat, which sits on Maharashtra's northern border. Mr Gou said earlier this week that he plans to make India a global export hub for electronics at the company, in addition to targeting India's fast-growing domestic market.
Google set to reboot Android One smartphone project in India Effort to build market for cut-price phones has struggled since New Delhi launch last September
21 HOURS AGO by: James Crabtree in Mumbai
Google is to relaunch its Android One cut-price smartphone project, placing the goal of delivering a sub-$50 device at the heart of a "massive" investment push by the technology group into India's internet market.
Rajan Anandan, managing director in India and Southeast Asia, told the Financial Times that the company remained "very committed" to Android One — a set of specifications that help manufacturers make cheap, good quality smartphones — which has struggled since its launch in New Delhi last September.
The much-hyped mobile standard had "not delivered to expectations", Mr Anandan admitted, citing supply chain issues that have led to shortages of the phones, which are largely imported from China. But he said plans for a reboot would be revealed in "the next few weeks".
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"It is like any company when you try to launch a new initiative — we had a few hiccups," he said.
Android One is an important part of Google's drive to replicate its dominance in traditional desktop search by building new businesses linked to its Android mobile operating system. It is particularly focused on hundreds of millions of first-time smartphone users in emerging markets such as India.
Phones made under the standard were priced at about $100 at the launch last year, but Mr Anandan says he wants to target the "sweet spot" for mass-adoption in India's cost-conscious smartphone market of between Rs2,000 and Rs3,000 ($31-$47).
Google's plans come as other global technology companies race to add users in India's fast-expanding internet population, which is set to surpass 500m by 2017. Facebook and Twitter already count the country as their second and third largest market by users respectively.
But Google faces challenges in India. The local market for digital advertising — where the group earns most of its revenues — remains tiny. Google products such as video site YouTube and maps also require fast connections to work effectively on mobile devices, yet India is marked by slow bandwidth.
In response, Mr Anandan said the group was ramping up a "very large-scale" investment programme to bring tens of millions of small businesses online and develop content suited to Indians whose first language is not English.
Google also plans to fend off local competitors by developing more products suitable for Indian customers with slow data connections. This is in addition to its recently launched offline versions of YouTube and maps, as well as a stripped-down version of its traditional search engine.
"There are several battlegrounds where we are not winning [and] local search is clearly the one where it's most apparent," Mr Anandan said, noting competition from JustDial, a Mumbai-listed Indian search start-up.
"Strategically it [India] is very, very important," he added. "Don't get me wrong, the revenue is interesting but … we're here really because 10 years from now a billion Indians will be online and when we have a billion Indians online we think that's going to make a huge difference to the global internet economy."
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