NEW DELHI | CHENNAI: An old Pepsi building in Sri City in Andhra Pradesh will soon start humming with activity again. That’s where Foxconn Technology Group, the world’s largest contract manufacturer, will make phones for Chinese brand Xiaomi Foxconn had begun work on the site across from the Tamil Nadu border two months after shutting down the third and last of its plants in that state in February. The Sri City unit won’t be too big — it will make about 10,000 phones a day — but Foxconn has ambitious plans for India that could eventually make the country a key manufacturing base for the company, comparable with China.The maker of iPhones and iPads for Apple and Kindles for Amazon is planning to set up 10-12 factories in India, each employing at least 10,000 people, with an initial investment of about $2 billion (Rs 12,700 crore) over the next five years.The Taiwan-headquartered company, which has a client list that includes Cisco, Dell, Microsoft and Hewlett-Packard, plans to make smartphones, tablets, televisions, routers, set-top boxes and printers among other products in India, said a person aware of the strategy.Making the iPhone in India may be some years away though as this "requires high-precision equipment and high investment, plus a larger supplier base. This could happen some years later as the first step will be assembly of phones", the person said. Despite being forced to close its plants in Tamil Nadu, the company is betting big on India."India is the top priority for the company, which is why Foxconn is already holding talks with various state governments," said the person cited above. Another person said the company is evaluating several states, including Andhra Pradesh, Maharashtra, Gujarat, Telangana, Karnataka and Uttar Pradesh, for establishing the factories and that a first round of meetings had been held.Foxconn’s expansion plan ties in with the India push of Japanese telecom and Internet giant Soft-Bank. On Tuesday, SoftBank announced a joint venture with Foxconn and Bharti Enterprises in renewable energy that will invest $20 billion over 10 years.SoftBank Chairman and CEO Masayoshi Son said his group and Foxconn are also in talks to form a joint venture for electronics manufacturing in India. The Taiwanese company will lead the venture with SoftBank playing supporting role. There is speculation that Bharti Enterprises may also join them. The government’s ‘Make in India’ plan has given rise to optimism on the manufacturing front.At the same time, experts point out that scale is integral to Foxconn’s plans. Other possible infrastructure-related stumbling blocks include land and power supply. Support from the central and state governments will be critical as the company has indicated the need for tax incentives and policy stability, said one of those aware of the plan."Foxconn is looking at India for the long run," the person said. "There have to be setups in place to ensure that we can have a long-term plan." It could also consider a return to Tamil Nadu, where it’s planning to set up a trial unit to make televisions.A spokesperson for Foxconn Technology Group declined to comment on specifics. "We would continue to consider investments in India if they made commercial sense," the person said.A Xiaomi India spokesperson said the firm’s plans for local manufacturing had not been finalised yet. "Our manufacturing plans are still a work-in-progress. Until we finalise on them, we won’t be able to comment on speculation."Foxconn Chairman Terry Gou rerecently told Reuters that its Indian plants will be modelled on those in China, where it has 25 production sites employing more than 1 million people in total. Factories in India will scale up to China levels over time and will entail greater investment and the need to hire more people, in line with the aims of the ‘Make in India’ programme.Apart from that, this year’s Budget made imported handsets more expensive than those made locally. This has prompted handset makers such as Micromax, Xiaomi, Lava, Motorola, Lenovo and LG to say they plan to start production in India over time.Given its global scale, Foxconn would want to make India a manufacturing and export hub, said one of the people cited above. That could halve time and cost of exporting goods to Africa or Europe compared with China.Foxconn will bring some of its partner supplier units from China but is likely to source locally to build economies of scale, thus giving the Indian manufacturing ecosystem a boost. One of the people cited above said Nokia’s manufacturing capabilities in Sriperumbudur in Tamil Nadu would have been ideal for Foxconn to begin mobile handset manufacturing locally, but the asset freeze continues to be an issue, thwarting sale of the plant and eventual use of its machinery.The company isn’t sure if it should revive its own plant there, given the continuing labour unrest, the person said. The component-making plant was a key supplier to Nokia, which shut operations last year.