Fox­conn Looks to Re­vive TN SEZ Tax in­cen­tives to elec­tron­ics man­u­fac­tur­ers push Tai­wanese firm to re­new its plan

The Economic Times - - Companies: Pursuit Of Profit - Bha­rani.Vaitheesvaran @times­

Chen­nai: Tai­wanese phone­maker Fox­conn is con­sid­er­ing util­is­ing its large SEZ (Spe­cial Eco­nomic Zone) near Chen­nai to pro­vide in­fra­struc­ture for com­po­nent man­u­fac­tur­ers who could sup­ply to its phone assem­bly lines in the Sri City SEZ in Andhra Pradesh. The Fox­conn SEZ has been silent but for a small man­u­fac­tur­ing unit in­side it af­ter Nokia closed its plant in 2014. Fox­conn is bas­ing its plan to re­new man­u­fac­tur­ing in Tamil Nadu on the Cen­tre con­tin­u­ing to of­fer tax in­cen­tives to elec­tron­ics man­u­fac­tur­ers.

“If all goes ac­cord­ing to the plan, we would have sup­pli­ers op­er­at­ing from the SEZ by this year. Of course, these sup­pli­ers need to find the in­cen­tive to make com­po­nents in In­dia, rather than China. For that the Cen­tre needs to act,” said an of­fi­cial aware of Fox­conn’s plans, re­fus­ing to be iden­ti­fied.

Fox­conn did not re­ply to email queries on its plans in Tamil Nadu. The Tamil Nadu gov­ern­ment has main­tained that the thrust to re­vive elec­tron­ics man­u­fac­tur­ing had per­sisted ever since companies like Fox­conn, BYD, Lite-On Mo­bile and oth­ers left the state af­ter Nokia’s fall. “In for­mer chief min­is­ter Jay­alalithaa’s mem­o­ran­dum to the Prime Min­is­ter, the state had men­tioned that Fox­conn is will­ing to re­vive the Nokia fac­tory and we had urged the Cen­tre to take the nec­es­sary steps to de-freeze the as­set,” said a top bu­reau­crat with the in­dus­tries depart­ment. An of­fi­cial with the Madras Ex­port Pro­cess­ing Zone (MEPZ) Spe­cial Eco­nomic Zone said: “They have had ini­tial dis­cus­sions with us start­ing op­er­a­tions from the SEZ. But, no ap­pli­ca­tions have been submitted so far. Once the sub­mis­sions are done, the file goes to the Unit Ap­proval Com­mit­tee. It will take some time.”

Through a coun­ter­vail­ing duty two Bud­gets ago, the Cen­tre made mak­ing phones in In­dia cheaper than im­port­ing com­plete hand­sets from China. It sub­se­quently brought com­po­nents like bat­tery packs un­der the in­de­geni­sa­tion con­cept called the Phased Man­u­fac­tur­ing Pro­gramme (PMP). If the fi­nance min­istry wills it, the next step — PMP III would spur Fox­conn’s plans to re­open the gates to the 150-acre SEZ for sup­pli­ers.

The fac­tory in Sun­gu­var­chathi­ram in Kanchipu­ram district has huge ar­eas of va­cant land be­sides com­pleted build­ings, ware­houses, and ma­chin­ery for man­u­fac­tur­ing elec­tron­ics.


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