Foxconn Builds $2.5 Billion iPhone Factory in India: A Strategic Shift Amid US-China Tensions

The plant will become Foxconn's second-largest iPhone manufacturing facility outside of China, with an investment of up to $2.5 billion and an expectation to create 40,000 local jobs.

Foxconn’s “Project Elephant” is being built on an area of over 1.2 million square meters.

In the context of escalating U.S.-China trade tensions, Foxconn – Apple’s largest iPhone assembly partner – is accelerating its global supply chain diversification strategy by investing billions of dollars into India.

In Devanahalli, an agricultural town on the outskirts of Bengaluru, a massive iPhone manufacturing plant is taking shape as a testament to the strategic shift away from China.

GIANT $2.5 BILLION IPHONE MANUFACTURING PLANT IN INDIA

Foxconn’s project, dubbed "Project Elephant," is being built on an area of over 1.2 million square meters — equivalent to 220 football fields. It will become Foxconn’s second-largest iPhone production facility outside of China, with an investment of up to $2.5 billion and the potential to create 40,000 local jobs.

According to the plan, Foxconn aims to double the number of iPhones produced in India to 30 million units per year, accounting for about 15–18% of the global iPhone output. Shifting assembly lines to India is not only a move to mitigate geopolitical risks but also a strategic step ahead of potential new tariffs from the U.S.

The Trump administration consistently made announcements regarding changes to tariff policies, including those involving high-tech imports from China, such as smartphones, semiconductor components, and telecommunications equipment — key products for Apple.

This situation has forced Apple, a company heavily reliant on its supply chain in China, to speed up its “China exit” plans. Foxconn — responsible for over 60% of global iPhone production — is leading this transition. With the establishment of the plant in Devanahalli, India, Foxconn can supply iPhones to the global market without being impacted by U.S. tariffs imposed on goods from China.

DOMINO EFFECT: REAL ESTATE BOOM, TECH INVESTMENT SURGE

Devanahalli, once known for pomelos, mulberries, and grape farming, is witnessing an industrial revolution. Foxconn’s project, approved by the Karnataka state government in 2023, marks the area’s most significant transformation to date. Within just one year, real estate prices have surged by 35%, and a slew of new infrastructure developments such as housing, tech parks, and roadways are being rapidly constructed.

Ashwanth Sajeevan, CEO of PropPulse.ai — a real estate analytics platform in Bengaluru — commented: “Foxconn isn’t just building a factory; they are sowing the seeds for a new industrial city. This is a game-changing catalyst not just for Devanahalli but for the entire ‘Make in India’ strategy promoted by the government.”

The ripple effects of Foxconn’s project are spreading rapidly. Within a 20-kilometer radius of the plant, more than 60 residential projects are underway. Other tech companies are also moving in: Wistron (the iPhone manufacturer now owned by Tata Group) is expanding a nearby plant, SAP plans to open a new office, and Amazon is preparing to relocate its Bengaluru office to Devanahalli by 2026.

Foxconn is also simultaneously executing "Project Cheetah" — a factory specializing in electric vehicle components — indicating a long-term, multi-sector investment strategy in India.

CHALLENGES IN TRAINING LOCAL WORKFORCE

However, the industrial boom is not without conflict. Over 1,300 households in 13 villages around Devanahalli are protesting land acquisitions, demanding fair compensation and genuine employment opportunities. Meanwhile, many locals fear that most factory jobs will go to migrant workers or skilled labor from elsewhere, due to insufficient local investment in education and vocational training.

Ramesh Cheemachanahalli, a local farmer leader, questioned: “Are the people of Devanahalli being prepared to work in these modern factories? Or will we just be standing by, watching the changes happen?”

Despite these barriers needing resolution, it’s undeniable that Devanahalli is becoming a model for the global supply chain shift — from China to India. With Apple’s “China Plus One” strategy, Foxconn’s strong presence, and the Indian government’s investment incentives, this area is well on its way to becoming a symbol of a new India: modern, tech-driven, and a critical player in the post-tariff global production network.

Source: VnEconomy