Foxconn facility in Bengaluru on course, first assembly line expected to be up in April

The state-of-the-art iPhone assembly facility the Hon Hai Technology Group (Foxconn) building in Bengaluru is on course and the first assembly line is expected to go on stream in April, sources privy to the discussions told ET.

The work is progressing fast and as per the schedule, they added, while declining to be identified. Foxconn, which is also the world’s largest contract manufacturer, is investing $2.7 billion on the factory and assorted facilities.

The Taiwanese giant is creating capacity to assemble 20 million smartphones annually at the 300-acre campus in the IT investment region (ITIR), near the Kempegowda International Airport. The plant will also be Foxconn’s largest such unit in India, when commissioned.

The additional investment will go towards setting up assembly facilities as planned as well as dwelling units (dormitories) for workers. The work is progressing at a rapid pace, the sources said.

Speaking to ET, Industries and Infrastructure Development Minister MB Patil said: “We remain fully committed to ensure the high-profile project meets its completion timelines. I am personally seeing to it that there are no obstacles.”

The Minister added that the chief minister (Siddaramaiah) has made it clear that there cannot be any delay with regard to clearances by individual departments as the (Foxconn) investment has been cleared at the highest level. “Investors should feel ease-of-doing-business in Karnataka in a true sense,” Patil added.

There were some small issues related to land, the minister said, and he was personally involved in getting them resolved at the earliest. “Foxconn intends to fast-pace their project and start manufacturing activities early,” he said.

When fully up and running, the factory is expected to add about 50,000 direct and indirect jobs, according to government estimates.

The previous BJP regime had begun the process and the incumbent Congress government has been pursuing the ambitious project for several months now.

Foxconn chairman Young Liu had met then CM Bommai in March, and both sides signed a memorandum of understanding (MoU). Liu, in a statement in August, had said his company was excited about the possibilities that Karnataka offered for the company’s plans in India.

“The state’s conducive business environment, coupled with its skilled workforce, makes it an attractive destination for our high-tech ventures. We look forward to building our success story with the state.”

The investment in the smartphone facility adds up to $2.7 billion after Karnataka’s high-level committee cleared further investments on the project on Tuesday. The government had, in March, cleared Foxconn’s proposal to set up a mobile unit at an investment of $1 billion (Rs 8,000) crore. The company has subsequently increased the investment by $1.7 billion (Rs 13,500 crore).

Foxconn has asked for five million litres of water a day. The government has assured the team that the government will meet the facility’s water needs while also meeting other requirements such as road and power supply.

The Taiwanese iPhone maker has plans to build the plant in three stages and has already paid Rs 90 crore, which is 30% of the land cost, to the Karnataka Industrial Areas Development Board (KIADB).

The Taiwanese manufacturer’s India push has been triggered by strong domestic demand for iPhones as well as a surge in exports from India, led by the diversification of global supply chains away from China. The company already manufactures iPhones for Apple in India. It has facilities in Tamil Nadu, Andhra Pradesh and Telangana.

Karnataka’s officials believe an investment by Foxconn would help the state attract many other frontline global electronics companies to the state.

Foxconn has two facilities in India currently — one at Sriperumbudur in Tamil Nadu, under Hon Hai, where it makes iPhones, and the other operated by Bharat FIH (previously, Rising Star) in Sri City, Andhra Pradesh, which acts as a contract manufacturer for brands such as Xiaomi.

Earlier this year, Karnataka’s Legislature even passed a Bill proposing amendments to its Factories Act, 1948, to align the law with labour practices followed in some western countries and in China in a bid to draw investments.

Workers in high-end electronics manufacturing typically work longer hours in a day, and having two shifts of 12-hour cycles would boost the interests of high-end electronics manufacturing companies.