In a recent turn of events, ET reports that government officials from Tamil Nadu and New Delhi have met with Taiwanese manufacturer Foxconn’s founder Terry Gou ten days ago, to discuss the proposed sale of Nokia’s Chennai factory.
The government’s rationale behind the meeting is to revive the operations at the 212-acre facility built on the outskirts on Chennai and turn it into a smartphone manufacturing hub once again. Now, that Microsoft has sold the feature phone manufacturing business to Foxconn subsidiary, FIH Mobile — this facility could again be the birthplace for future Nokia smartphone releases.
Sources close to the development told ET that officials from the Department of Electronics and IT have met with Gou and broken down the basic details of the deal to Foxconn chief. The source also outline the facts and says that,
Now, the next task at hand is to ensure the aspirations of Foxconn and the Indian government are aligned, and to make sure the Tamil Nadu government also finds it a worthy enterprise to get Foxconn to reopen the factory.
The Chennai facility is still under question and wraps due to the Rs. 21,000 crore tax dispute with the income-tax department. So, the government now needs to work on how to release this facility from the tax dispute for Foxconn to take over and revive the factory.
The Chennai factory was capable of producing over 15 million handsets a month, when at its peak. When Microsoft bought off Nokia’s hardware division, it left out the Chennai facility and its 12,000 employee staff out of the deal. The tax authorities thus sealed off the factory and its operations back in September 2013.
Foxconn as reports say has huge interest in setting up facilities in India as it sees the country at the cusp of a digital revolution. The company is not new to India, but already has a working plant in in Andhra Pradesh but wants to enter Tamil Nadu in search of high-quality labour. It is also committed to investing over $5 billion in setting up operations in Maharashtra.
With the plan to bring the necessary digitized revolution in India, the government officials also want to jump-start electronics manufacturing in the country and Nokia’s Chennai factory is one of the key prospects for that matter. This could also help in the revival of Nokia in India, who has decided to make a comeback to the smartphone and tablet market in the beginning of next year.