Foxconn's Bharat FIH bet on Xiaomi — then Xiaomi's orders fell over 70%

By July 2024, Foxconn group's Bharat FIH had lost three independent directors in three months — InterGlobe Aviation chairman Venkataramani Sumantran and Sify Technologies cofounder Ramaraj R in March, former IT and telecom secretary Aruna Sundararajan a month before ET's report — with one board member citing 'lack of clarity in the organisation's way forward... The company seems to be on a path of decline.' The company was also likely to shutter its Sri City, Andhra Pradesh facility, its first plant in India, set up in 2015, due to a massive drop in orders from key client Xiaomi.

Orders from Xiaomi had declined by over 70%, a person aware of the matter told ET. Bharat FIH primarily made devices for Xiaomi and some volumes for Nokia, staying dependent even as Xiaomi fought regulatory run-ins with the Indian government and broadened its electronics-manufacturing partners to DBG and Padget — and added domestic contender Dixon Technologies, which with production-linked incentive (PLI) benefits Bharat FIH did not qualify for (its devices' unit value was below Rs 15,000) built a 32% market share to Bharat FIH's single digits, fourth in the market.

The January 2024 exit of India head Josh Foulger, who had helped Foxconn and clients including Xiaomi expand in India, left the company 'being run directly from Taiwan with little clarity on the way ahead', people aware of the circumstances said. The Sriperumbudur facility near Chennai had diversified into telecom equipment, EV components, TVs and displays to offset the mobile-assembly slump, while Foxconn's expanding Indian iPhone production flowed through other subsidiaries, largely bypassing Bharat FIH.

Its first India plant, Sri City (2015), likely to be shuttered; fourth place in Indian phone contract manufacturing with single-digit share

Customer concentration: assembling primarily for Xiaomi left revenue hostage to one client's fortunes in India.

Xiaomi's regulatory run-ins and its shift to DBG, Padget and Dixon drained the order book.

PLI incentives went to higher-value device makers; Bharat FIH's sub-Rs 15,000 units never qualified.

The pivot to other categories came too late, after the January leadership exit left strategy running from Taiwan.

A contract manufacturer's biggest customer is not a strategy: when the client wobbles, only early diversification stops the slide.

Bharat FIH was consolidating operations under one roof while diversifying Sriperumbudur's output, and told ET that India remained an important operational footprint in FIH's global manufacturing strategy. Foxconn's wider India iPhone expansion continues through other subsidiaries.