Foxconn group’s Bharat FIH is facing tough times, having lost three independent directors in the last three months. The company might close its manufacturing facility in Sri City, Andhra Pradesh, due to a big drop in orders from key client Xiaomi.
Key Departures
Three board members recently left Bharat FIH, including InterGlobe Aviation chairman Venkataramani Sumantran, Sify Technologies co-founder Ramaraj R, and former IT and telecom secretary Aruna Sundararajan. A board member mentioned the lack of clarity in the company’s direction as the main reason for these resignations.
Dependence on Xiaomi
Bharat FIH has been heavily dependent on Xiaomi, and industry watchers feel the company did not keep up with competition. Orders from Xiaomi have declined by over 70%, prompting Bharat FIH to consider consolidating operations under one roof at its Sriperumbudur facility, where it has diversified into telecom equipment, EV components, TVs, and displays.
Company’s Response
Bharat FIH stated, “India is an important part of FIH’s global manufacturing strategy. FIH has operated in India since 2006 and continues to contribute to local communities and economies.”
Operational Challenges
The Indian unit has faced issues since January when country head Josh Foulger exited. The company is now run directly from Taiwan, with little clarity on the future. Experts say Bharat FIH failed to pivot quickly to other sectors and was too reliant on Xiaomi. The company does not qualify for the production-linked incentive (PLI) scheme because the unit value of its devices is less than ₹15,000.
Market Position
The mobile phone contract manufacturing market in India is led by Dixon with a 32% share, followed by Foxconn and DBG Group. Bharat FIH holds a single-digit market share and is fourth in the market. Bharat FIH is likely to shut its Sri City facility due to reduced orders from Xiaomi. The company’s heavy reliance on Xiaomi and failure to compete effectively have been significant challenges.