Foxconn’s Indian Subsidiary Loses Executives and Plans to Close a Factory Due to a 70% Drop in Xiaomi Orders

09 July 2024 34


Recently, a sudden storm swept through Foxconn’s Indian subsidiary. The root of this storm was the sharp drop in orders from Xiaomi, a major customer that it has long relied on. According to reliable sources, Xiaomi’s orders have dropped by as much as 70%, which is undoubtedly like a sharp knife that directly pierces the core lifeline of Foxconn’s Indian subsidiary. The chain reaction caused by this has pushed this foundry giant, which once had unlimited glory in the Indian market, into an unprecedented predicament.


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In the past three months, Bharat FIH has lost three independent directors, namely Venkataramani Sumantran, chairman of InterGlobe Aviation, Ramaraj R, co-founder of Sify Technologies, and Aruna Sundararajan, former IT and Telecom Minister. According to a board member, the company’s current direction seems unclear and seems to be on a path of decline, which is seen as the main reason for the recent wave of executive resignations.


In addition to the problem of executive loss, Foxconn’s Indian subsidiary is also facing a serious risk of factory closures. With the sharp decline in orders, some factories have inevitably fallen into a semi-shutdown state. This production stagnation not only hinders the production progress, but also brings unprecedented uncertainty and anxiety to the employees. Employees can only wait helplessly, hoping that the company can find a turnaround to avoid further deterioration of the situation.


According to people familiar with the matter, one of the main reasons for this dilemma is that the order volume of its main customer Xiaomi has dropped significantly. Xiaomi, as an important partner of Bharat FIH, has a direct impact on the company’s production plan and market layout. Therefore, there are reports that Bharat FIH may close its manufacturing plant in Sri City, Andhra Pradesh, which has been an indispensable and important production base for the company in India since its establishment in 2015. It is worth noting that Bharat FIH does not rely solely on the Sri City factory in India. It has also set up another factory in Sriperumbudur, a suburb of Chennai, to further expand its business in India.


In addition, Bharat FIH is actively promoting business integration. In view of the declining trend of mobile phone assembly business, the Sriperumbudur plant is adjusting its strategy, aiming to expand its business scope to multiple emerging fields such as telecommunications equipment, electric vehicle parts, televisions, and displays by integrating various resources in the industrial park, so as to seek a diversified development path. According to the Indian Bureau of Standards, Bharat FIH’s factory in Sri City mainly undertakes the task of assembling mobile phones for Nokia, Xiaomi and its sub-brands, while the production activities of the Sriperumbudur factory are almost entirely centered on Xiaomi products. Analysts emphasize that Bharat FIH’s over-reliance on Xiaomi has undoubtedly added additional risk factors to the company in the context of the current tense Sino-Indian relations and the Indian government’s strengthening of supervision over Chinese companies such as Xiaomi.


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The closure of Foxconn’s factory has undoubtedly cast a heavy shadow on the Indian government’s ambitious “Make in India” blueprint. And Tesla’s suspension of its investment plan in India has been a major setback to India’s progress in the field of new energy vehicles. This change not only indicates that India’s competitiveness in the new energy vehicle industry will be significantly weakened, and it will be difficult to quickly catch up with the international cutting-edge trends in the short term; at a deeper level, it also highlights the severe challenges India faces in attracting global high-tech and high-value-added industry investment. The stability of its market environment and the transparency of its policies are being widely questioned and scrutinized by the outside world.


In recent years, the Indian government has introduced a series of policy measures to promote the “Make in India” plan in order to accelerate the development of local manufacturing. However, the implementation of these policies is not smooth, and foreign-invested enterprises generally face difficulties such as unstable policy environment, lengthy and complicated approval process, and lagging infrastructure construction. The operational difficulties of Foxconn’s Indian subsidiary are most likely affected by the combined impact of these unfavorable factors, which has had an adverse effect on its further expansion plan in the Indian market and weakened its confidence in continued investment. Therefore, for all companies that intend to do business in emerging markets such as India or are already operating in these markets, understanding and effectively responding to these challenges will be an important cornerstone to ensure their long-term success and sustainable development.


As an emerging market, India has huge potential to attract foreign investment. However, to fully tap this potential and achieve the goal of attracting foreign investment, the Indian government needs to be committed to implementing more open, inclusive and stable policy measures. This includes but is not limited to strengthening infrastructure construction to improve investment convenience; improving the quality and technical level of the workforce to match the needs of modern industries; and creating a more superior investment environment to provide all-round support and protection for foreign-funded enterprises. Only in this way can India truly attract the attention of global investors and effectively promote the continued prosperity and development of its economy.




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