88 billion rupees to build a factory in India?! Famous fruit chain enterprise clarifies late at night: rumored false funds | India | enterprise
Recently, it was reported that Foxconn Group's subsidiary, Industrial Fulian, will invest 88 billion rupees in India to manufacture Apple phone cases.
The news has attracted the attention of Industrial Rich Union. On the late night of the 18th, the company issued a statement stating that it has not signed any relevant agreements for investing in and setting up factories in India, nor has it promised any investment amount. The rumors on online platforms are purely false reports. At present, the company does not have any significant information that should have been disclosed but has not been disclosed.
Industrial Fulian responds to market rumors
According to multiple media reports, on July 17th local time, the Minister of Commerce and Industrial Infrastructure of Karnataka, Battier, tweeted that Foxconn Group's subsidiary, Industrial Alliance, will invest 88 billion rupees in India to build a factory for the manufacturing of Apple phone casings, which is expected to create over 14000 job opportunities. The minister also released photos of meeting with Zheng Hongmeng, Chairman of the Industrial Wealth Federation.
On the same day, the Indian media "India Express" also reported on the news, stating that this is an investment proposal worth 88 billion rupees proposed by the Industrial Alliance to the government of Karnataka, which requires 100 acres of land. This factory is a supplement to the previous project, and its production includes the mechanical components, screens, and casings required for mobile phones.
On the evening of July 18th, Industrial Rich Union issued a statement in response to market rumors. Gongye Fulian stated that the company has noticed rumors circulating on online platforms that the company has signed an agreement to invest and establish a factory in India, and immediately initiated verification. After verification by the company, the statement regarding the media coverage on the above-mentioned online platform is as follows: the company has not signed any relevant agreements for investing in and setting up factories in India, nor has it promised any investment amount. The rumors on the online platform are purely false reports. At present, the company does not have any significant information that should have been disclosed but has not been disclosed.
Foxconn withdraws from semiconductor projects in India
In fact, just a few days ago, Foxconn announced its withdrawal from a $19.5 billion semiconductor joint venture with Indian mining group Vedanta. According to the original plan, this should have been India's first semiconductor foundry.
Foxconn's parent company, Hon Hai Group, issued a statement stating that in order to explore "more diversified development opportunities", according to the agreement between the two parties, Foxconn has decided not to proceed with the joint venture project with Vedanta, which is now fully owned by an Indian company. Vedanta Group announced on the same day that the company is fully committed to its semiconductor projects and will collaborate with other partners to establish India's first contract factory.
It is reported that Foxconn and Vedanta announced a cooperation in February last year, planning to build a semiconductor manufacturing factory in the hometown of Indian Prime Minister Modi in Gujarat. Foxconn stated at the time that it would invest $118.7 million and hold a 40% stake in the joint venture. This also makes Foxconn a major foreign technology manufacturer in response to the Indian government's "localization of chip manufacturing" strategy. The Indian government approved a $10 billion incentive plan at the end of 2021 to attract global semiconductor and display manufacturers to build factories in India.
Regarding the specific reasons for the withdrawal, some foreign media quoted informed sources as saying that Foxconn's decision to withdraw from the joint venture was due to concerns about the delayed approval of incentive measures by the Indian government and debt issues of the British parent company of the Indian company.
Xiaomi and others are stepping on a pitfall in India
The current Indian market has become a quagmire for many domestic mobile phone brands.
Recently, the Indian law enforcement agency issued a formal notice to Xiaomi India, company executives, and three banks, stating that India accused them of illegally transferring funds to foreign countries and suspected violations of the Foreign Exchange Management Act.
In April 2022, the Indian law enforcement agency charged Xiaomi that since 2015, Xiaomi and its Indian subsidiary Xiaomi India have illegally remitted money to foreign entities under the name of "franchise fees", which violates the relevant provisions of India's 1999 Foreign Exchange Management Act. Therefore, the Indian authorities seized 55.51 billion rupees of funds from the bank account of Xiaomi India's subsidiary.
Xiaomi stated that it is consistent with its previous attitude and has not been confiscated, but frozen. At that time, Xiaomi India declared, "We are studying the matter and waiting for a written judgment. Here, we are willing to reiterate that our business in India complies with relevant laws and regulations in India."
In fact, not only Xiaomi but also Chinese smartphone manufacturers such as Vivo and OPPO have been hit by the trap in India. In July 2022, OPPO was accused of evading tariffs by 43.9 billion Indian rupees. The Indian Revenue Intelligence Agency stated that OPPO mistakenly used tariff exemptions when importing mobile phone parts and did not include royalties when calculating the transaction value of imported goods.
Vivo faces charges of tax evasion of 22.1 billion rupees and has frozen assets of 4.65 billion rupees. In July 2022, the Indian law enforcement agency conducted a raid on 48 production and business premises related to vivo and its distributors throughout India, claiming that vivo's sales revenue in India was transferred overseas to avoid taxes.
Zhang Xiaorong, Dean of the Deep Technology Research Institute, said that the experience of mobile phone manufacturers such as Xiaomi in the Indian market has sounded an alarm for Chinese companies, and India is not an investment paradise.
"For a long time, people have had an inherent impression that India has a large population base and is the world's second largest mobile phone consumer market. However, for Chinese companies, the Indian market poses greater risks and faces multiple obstacles and challenges, which are related to their local culture and political environment." said Zhang Xiaorong.
