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