Foxconn Technology Group, Dixon Technologies India Seek India to Pay Pending Production-linked Incentives
Foxconn Technology Group, a supplier to Apple Inc., and Dixon Technologies India Ltd. have sought to request billions of rupees in subsidies from India, in the belief they are entitled to under the government's production incentives program.
An amount of the Rs 41,000 crore ($4.8 billion) in subsidies, which the government gave its word to manufacturers, still stalls in distribution given the failure to meet production targets of certain businesses.
Reports indicate that Dixon and Foxconn believe that they qualify for a certain amount of the un-allocated funding under the program's regulations.
It is said that annual value-based thresholds, capped at specific levels, were established for both national and international tech companies under Prime Minister Narendra Modi's production-linked subsidy plan.
Additionally, the project was expected to be distributed to any subsidies that were not used due to certain enterprises not producing enough to meet their goals to the other eligible applicants who produced more than they did.
In the fiscal year ending in March 2023, Foxconn's iPhone output was approximately Rs 30,000 crore above its Rs 20,000 crore cap. Additionally, Dixon's output of Rs 8,000 crore in the fiscal year ending in March 2024 exceeded its Rs 6,000 crore cap.
As India attempts to attract chipmakers and corporate behemoths like Microsoft Corp., which intends to invest billions in the most populous nation in the world to promote cloud computing and artificial intelligence, the stability of Indian policy making becomes even more crucial.
For example, Apple partners assembled $14 billion worth of iPhones domestically during the previous fiscal year. Samsung Electronics Co. of South Korea has also used the scheme to increase exports.
As India attempts to attract chipmakers and corporate behemoths like Microsoft Corp., which intends to invest billions in the most populous nation in the world to promote cloud computing and artificial intelligence, the stability of Indian policy making becomes even more crucial.
Reports claim that the government is also looking into whether Dixon, a contract manufacturer, made additional investments to produce Xiaomi Corp.'s smartphones or if the equipment were simply moved from another plant that had previously manufactured the Chinese brand's gear. Lower production of Xiaomi's devices as a result of losing ground to other smartphone manufacturers in India makes it more difficult to transfer cash intended to increase smartphone output.