Foxconn was reported to have planned on investing over Rs 7,500 cr ($1bn) in India, as part of moving the production of iPhones out of China. The factory in Tamil Nadu was expected to provide jobs to as many as 6,000 people throughout its expansion in three years.
The trend of India attracting the attention of MNCs seems far more pronounced in the backdrop of the coronavirus crisis, as major American and European companies are pulling out of China and setting their sights on friendlier shores. Apple’s shifting of manufacturing facilities to India grants it a sort of indemnity in the event of an escalation of trade conflicts between the US and China. The company, which had been speaking to the Indian government, is keen on turning India into an export hub, with plans to make iPhones worth over $40 bn (Rs 3 lakh cr) indigenously. The positioning seems appropriate as Foxconn already has a facility in Andhra Pradesh that makes phones for Xiaomi – a Chinese contender and a market leader in budget smartphones in India.
The iPhone maker kicking off local production comes close on the heels of yet another coup for India Inc – on the software front this time around. Earlier this month, the Chennai-born CEO of Google and Alphabet, Sundar Pichai made headlines internationally as the technology giant announced an investment of Rs 75,000 cr ($10 bn) to drive India’s digital transformation, over 5-7 years. The company’s energies focused on a quartet of goals – namely affordable access to the internet; offering localised solutions in spheres such as agriculture, health, consumer tech, and education; empowering SMBs; and deploying AI for everything from strengthening rural economies, to increasing literacy and even predicting outbreaks.
For a country reeling under the onslaught of the virus and its associated side effects of widespread unemployment and pandemic fatigue, the gush of Foreign Direct Investment (FDI) into the nation in the recent past might serve as a gentle breath of revival. Over the recent few weeks, several international companies went on to pledge an estimated $20 billion of FDI into India. Among those leading the pack was Facebook with a highly prized investment of $5.7 billion in the country’s largest telecom company Reliance Jio. Others like Amazon (with a pledge of an additional $1 bn in India) and Microsoft’s venture fund M12 that was keen on a local office are driving India’s FDI hopes skyward. The quantum so far stands at a staggering $40 billion this year. Foreign investment into India was 134% higher in 2019 than it was back in 2015.
It might be premature to term these developments as the definitive investments that would turn around India’s fortunes during a moment of crisis – and put it on the fast track to growth – by inspiring even more companies to follow suit and explore the outer limits of Make in India. To make that a reality, the IMF has advised India to cautiously implement reforms to attract further investments. Additional infrastructure investment is one of the priorities, alongside measures that ensure sustainable and inclusive growth. Opportunities such as these come once in a blue moon. And India could do well by not squandering them away in a muddle of red tape and petty politics.