At the height of the smartphone boom, Nokia once operated a massive mobile phone factory in Chennai, India, producing 100 million units annually. However, this facility was eventually shut down. Recent reports indicate that Foxconn is nearing the final stages of negotiations with the Tamil Nadu government to revive the plant, signaling a potential comeback for mobile phone manufacturing in the region.
In 2014, Nokia sold its mobile phone division to Microsoft for over $7 billion, which also led to the closure of several production facilities in India. This decision resulted in the loss of jobs for approximately 15,000 workers. A few years later, in 2016, Foxconn signed an agreement with the Tamil Nadu government to restart the Chennai factory. Despite initial enthusiasm, progress on the project has been slow.
According to a report from *The Economic Times* on March 5, Foxconn has made some progress. Earlier this year, the company acquired some of the equipment previously used in the mobile phone factory, suggesting renewed interest in the site.
One major challenge facing the project is the factory’s outstanding tax liabilities to Tamil Nadu. While both parties are reportedly close to resolving this issue, no official timeline has been announced for the final agreement.
A senior Indian official recently emphasized the urgency of restarting the factory, highlighting its importance for local employment and economic growth. Currently, Foxconn operates a mobile phone manufacturing base in Seri, Andhra Pradesh, employing 6,000 people and producing devices for brands like Xiaomi, Jinli, and Nokia (through HMD Global).
India has become a key market for Chinese smartphone brands, with Xiaomi emerging as a strong competitor. In the fourth quarter of last year, Xiaomi surpassed Samsung to become the top seller in the Indian market, with four of the top five brands being Chinese companies.
This growing presence has prompted Foxconn to expand its manufacturing footprint in India. By the end of 2018, its production capacity in the country had doubled to 30 million units. Several Foxconn subsidiaries are now scouting new locations to further expand their operations.
If Foxconn successfully revives the Nokia Chennai plant, it could significantly boost its production capabilities and strengthen its position in the Indian market. Additionally, in 2016, Foxconn signed an agreement with the Maharashtra government to invest $5 billion in building electronic manufacturing bases. However, recent complaints from Indian officials suggest that the company has not fully honored its commitments.
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