Foxconn's expansion of iPhone manufacturing in India is contrasting sharply with the challenges faced by its local subsidiary responsible for Android smartphone production. Bharat FIH, the Foxconn group's Indian arm, is reportedly grappling with a senior executive exodus and may close one of its two facilities.
According to sources familiar with the matter, as reported by the Economic Times, Bharat FIH has seen the departure of three independent directors over the past three months. Venkataramani Sumantran, chairman of InterGlobe Aviation, and Ramaraj R, co-founder of Sify Technologies, both left in March. Aruna Sundararajan, former IT and telecom secretary, resigned a month ago.
The report also notes uncertainty regarding the status of Dipali Hemant Sheth, another independent member of the Bharat FIH board. Sheth holds positions on several other corporate boards, including Adani Wilmar and UTI AMC.
While Foxconn is expanding its iPhone production capacity in India through other subsidiaries, Bharat FIH is facing challenges due to a significant decline in orders from Xiaomi, which have reportedly dropped by 70%. The subsidiary has not seen significant involvement in Foxconn's iPhone production expansion efforts.
To offset the downturn in mobile phone assembly, sources indicate that Bharat FIH is consolidating operations and diversifying into sectors such as telecom equipment, EV components, TVs, and displays at its Sriperumbudur facility.
Overreliance on Xiaomi and Market Shifts
According to the Bureau of Indian Standards, Bharat FIH manufactures mobile phones for Nokia and Xiaomi, along with Xiaomi's sub-brands, at its Sri City facility. However, at its Sriperumbudur facility, production is limited to Xiaomi and its sub-brands.
An unnamed analyst cited by the Economic Times suggests that Bharat FIH was overly dependent on Xiaomi, which is now facing increased regulatory pressure from the Indian government amid deteriorating China-India relations.
Xiaomi, which has long dominated the Indian smartphone market by shipments, ranked third in the first quarter of 2024, behind Vivo and Samsung. In response to these challenges, Xiaomi is diversifying its contract manufacturing partners in India, including Dixon Technologies, which has also secured orders from Google to manufacture Pixel smartphones in India.
Bharat FIH manufacturing facilities in India | |
Location | Smartphone brand |
Sri City | Redmi, MI, Xiaomi, nnjj, Nokia, Poco |
Sriperumbudur | MI, Redmi, Xiaomi, Poco |
Source: Bureau of Indian Standards, July 2024
