​Made in India Xiaomi phones are next on the card

India’s shut down factories are re-awakening to a new dawn. Thanks to mobile technology catching immense popularity among Indians, foreign based mobile companies, to keep up the pace of production, are setting up their manufacturing plants in the country. As per a news report in The Economic Times, a locked out building of a beverage company in Sri City in Andhra Pradesh has been chosen by Foxconn Technology Group to manufacture phones for Chinese brand Xiaomi.

Foxconn, world's largest contract manufacturer of phones had begun work on the site across from the Tamil Nadu border two months after shutting down the third and last of its plants in that state in February. The Sri City unit won't be too big - it will make about 10,000 phones a day - but Foxconn has ambitious plans for India that could eventually make the country a key manufacturing base for the company, comparable with China.

The maker of iPhones and iPads for Apple and Kindles for Amazon is planning to sup 10-12 factories in India, each employing at least 10,000 people, with an initial investment of about $2 billion (Rs 12,700 crore) over the next five years, confirms the news report.

Making the iPhone in India may be some years away though as this "requires high-precision equipment and high investment, plus a larger supplier base. This could happen some years later as the first step will be assembly of phones", the person said. Despite being forced to close its plants in Tamil Nadu, the company is betting big on India.

Foxconn's expansion plan ties in with the India push of Japanese telecom and Internet giant Soft-Bank. On Tuesday, SoftBank announced a joint venture with Foxconn and Bharti Enterprises in renewable energy that will invest $20 billion over 10 years.

SoftBank Chairman and CEO Masayoshi Son said his group and Foxconn are also in talks to form a joint venture for electronics manufacturing in India. The Taiwanese company will lead the venture with SoftBank playing supporting role. There is speculation that Bharti Enterprises may also join them. The government's 'Make in India' plan has given rise to optimism on the manufacturing front.

Foxconn Chairman Terry Gou rerecently told Reuters that its Indian plants will be modelled on those in China, where it has 25 production sites employing more than 1 million people in total. Factories in India will scale up to China levels over time and will entail greater investment and the need to hire more people, in line with the aims of the 'Make in India' programme.

Apart from that, this year's Budget made imported handsets more expensive than those made locally. This has prompted handset makers such as Micromax, Xiaomi, Lava, Motorola, Lenovo and LG to say they plan to start production in India over time.

Given its global scale, Foxconn would want to make India a manufacturing and export hub, said one of the people cited above. That could halve time and cost of exporting goods to Africa or Europe compared with China.