Foxconn to build new factories in India to combat increasing labor costs

Chinese electronics manufacturing giant Foxconn announced plans to make a big push into India. Chairman Terry Gou told Reuters that his company could spend a "couple of billion dollars" on developing 10-12 facilities in India, including manufacturing plants and data centers, by 2020.

Gou explains lots of the company's Chinese customers are pushing for an expansion into India. He doesn't really go into the details why Foxconn's customer base is desiring Indian manufacturing capacity but Reuters notes labor costs are likely the main reason. Foxconn is facing rising costs at its 25 manufacturing sites in China as wages have more than doubled in the last five years and workers demand improved work conditions.

"A lot of our customers, especially Chinese customers, need us to manufacture ... in India, to make phones, tablets, TVs, as soon as possible," Gou said in an interview on the outskirts of Guiyang in China's southern Guizhou province, where the company already operates a manufacturing plant and data centre.

The announcement makes Foxconn the latest tech powerhouse to set its sights on the world's second-most populous nation. It follows smartphone company Xiaomi Inc, which in March announced plans to begin manufacturing in India.