Foxconn wants a bigger cut of India's production incentives

Apple's iPhone assembly partner Foxconn has asked the Indian government for larger payments from a manufacturing fund, because other companies failed to meet standards.

Apple's increased production of iPhones in India was aided by the introduction of production-linked incentive schemes (PLI), promising funds to companies manufacturing in the country. Foxconn now wants a bigger cut of the subsidy pie.

Foxconn and Dixon Technologies India are requesting for the Indian government to bump up their subsidies under PLI schemes. The companies have already received approval for payments for reaching production targets, but they want more, reports Bloomberg.

India pledged a total of 410 billion rupees ($4.8 billion) in the form of subsidies to manufacturers. However, not all of the funds have been allocated, as other participating companies didn't reach agreed upon production targets.

According to Foxconn and Dixon, the program rules say that the firms are eligible to receive some of the unallocated funds. For Foxconn, sources say that could be as much as 6 billion rupees ($69.8 million) if successful.

The Indian government is currently reviewing the requests.

A successful program

India's efforts to increase production, with Apple and other companies, has certainly seen good results for the country. Especially when it comes to Apple.

In the case of Foxconn, it produced approximately 300 billion rupees worth of iPhone in the fiscal year through March 2023. The initiative had a cap of 200 billion rupees for Foxconn meaning it surpassed the scheme's imposed limit by 50%.

As of April 2024, India was producing approximately 14% of the world's iPhones. More production is expected, with an alleged intention to increase the share to 25% by 2025.

The subsidies won't necessarily provide that much to Foxconn to offset its massive investment in the country. That has included billions of dollars worth of expansion, including a 300-acre site near Bengaluru.