An iPhone XR
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New Delhi: Taiwanese manufacturer Foxconn plans to invest up to $1 billion, or around Rs 7,500 crore, to expand its existing plant in Tamil Nadu, Reuters reported Friday quoting sources.

Foxconn is a contract manufacturer that assembles Apple iPhones as well as phones for other brands like Xiaomi.

The planned investment in the Sriperumbudur plant will take place over three years, the agency reported. This plant is where the company manufactures Apple’s iPhone XR series.

The development comes even as another Apple contract manufacturer Wistron is also planning massive investment to scale up production in its plant in Karnataka.

These moves are part of the efforts of global companies to diversify their supply chains and reduce dependence on China.

Apple is reported to be moving away from China to minimise disruptions on account of the US-China trade war and the Covid pandemic.

Also read: Imperative banks raise capital as pandemic could increase NPAs, says RBI’s Shaktikanta Das

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India wooing global firms

India has been trying to woo Apple and other large multinational firms, and consequently their entire ecosystem of supporting firms, in its efforts to present itself as a viable alternative to China.

Over the last few weeks, Prime Minister Narendra Modi has raised the pitch for self-reliance and encouraging local manufacturing. On Thursday, he laid out the red carpet for foreign investors.

To attract foreign investments, India has announced several steps over the last few years. It has lowered income tax rates for new manufacturing units to as low as 15 per cent and at 25 per cent for existing firms. It has also taken steps to improve the ease of doing business and open up more sectors for foreign direct investment.

Both Wistron and Foxconn are reported to have even applied for the Indian government’s production-linked investment (PLI) scheme as they plan to expand manufacturing in India and eventually start exporting.

Under the PLI scheme announced earlier this year, the government promised incentives to promote manufacturing of electronic components. The Rs 40,000-crore plus scheme would have provided incentives as a percentage of the incremental sales of items produced in India.

Also read: Not ‘overworried’ about NPAs, no need for a blanket moratorium extension: SBI chairman


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