Up to $1 billion is being planned to be invested by the Taiwanese chip maker and Apple Inc’ largest contract manufacturer Foxconn in the expansion of its factory in of expand a factory in Southern India where the firm assembles iPhones for Apple, said a report from the news agency Reuters quoting sources with knowledge of the matter.

According to sources and analysts, this investment which is almost unprecedented for the company in India and the scale of which has not previously been reported, is a part of a slow, quite and phased strategy of Apple to shift its production out of China with an eye on the ongoing trade war between the United States and China as well as the novel coronavirus crisis.

“There’s a strong request from Apple to its clients to move part of the iPhone production out of China,” one of the sources with direct knowledge of the matter told Reuters.

There were no comments available from Foxconn as well as Apple over the reported development for the Taiwanese company.

Sources reportedly said that the investment will be made over a period of three years at Foxconn’s plant in Sriperumbur, some 50 km west of Chennai, where the Taiwanese firm assembles Apple’s iPhone XR.

Sources also reportedly said that the factory will also make some of the other iPhones of Apple that are currently made in China. The Reuters report did not name the sources.

According to report, about 6,000 jobs would be created by the investment to be made by the Taipei-headquartered Foxconn at the Sriperumbur plant in Tamil Nadu state. The company also has a manufacturing unit in the southern Indian state of Andhra Pradesh where Foxconn manufactures smartphones for a number of smartphone makers including for China’s Xiaomi Corp.

It would ramp up its investment in India, Foxconn Chairman Liu Young-way said last month but did not provide any further details.

Only about 1 per cent of the Indian smartphone market, the largest in the world, belongs to Apple and the pricy iPhones of Apple are often considered to be a status symbol. Manufacturing its iPhones in India will help Apple to reduce import taxes and shipment costs which would further help the company to reduce the price of its iPhones in India.

In the southern Indian tech hub of Bengaluru, a few of its iPhone models are made by Apple through Taiwan’s Wistron Corp. Reports have previously stated that a new production unit is planned to be opened by Wistron in India for manufacturing more devices of Apple.

“With India’s labour cheaper compared with China, and the gradual expansion of its supplier base here, Apple will be able to use the country as an export hub,” Neil Shah of Hong Kong-based tech researcher Counterpoint said.

The Indian government is focusing on boosting electronics manufacturing in the country for companies such as Foxconn. The government launched a $6.65 billion plan under which incentives to establish or expand domestic production in the country was offered to five global smartphone makers.

(Adapted from USNews.com)