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Amazon.com Inc. will manufacture its Fire TV stick streaming devices in India later this year in a boost to the government’s efforts to lure foreign companies to start manufacturing in India.

The devices will be produced by contract manufacturer Cloud Network Technology, a unit of Taiwan’s Foxconn, in Chennai, Amazon India said in a statement on Tuesday.

The manufacturing programme will be able to produce “hundreds of thousands of Fire TV Stick devices every year", catering to the demands of customers in India, Amazon said in a blog post. The company will “continuously evaluate scaling capacity to additional marketplaces/cities depending on domestic demand," it said.

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“Amazon will also look at sourcing electronic components from India apart from their assembly, as part of its manufacturing efforts in the country. It might take a call on manufacturing its other flagship devices later, based on how current production efforts proceed," said a person aware of the matter, seeking anonymity. Amazon is part of a growing list of multinationals looking to open manufacturing centres in India. US electric vehicle maker Tesla Inc. is close to signing a pact to start assembling its electric cars in Karnataka, the state said over the weekend.

Foxconn has also been planning to expand its manufacturing capabilities in the southern states.

The production of Fire TV sticks is part of the $1 billion investment commitment in India made by Amazon founder and chief executive Jeff Bezos last year. Through this, the company aims to create a million jobs by 2025 in the country, including those at its manufacturing centres, said the person cited above.

Amazon did not disclose investments for making the Fire TV sticks.

“India is poised to become a major player in the global supply chain in the electronics and IT products industry. We welcome Amazon’s decision to set up a manufacturing line in Chennai, as it will enhance domestic production capacities, and create jobs. This will further our mission of creating an ‘Atmanirbhar Bharat’, which is digitally empowered," IT minister Ravi Shankar Prasad said in a statement.

Prasad said, after a virtual meeting with Amit Agarwal, Amazon’s global senior vice-president and India head, that the government’s decision to launch the production-linked incentive (PLI) scheme has received a tremendous response worldwide. Last November, the Union cabinet approved the scheme for about 10 sectors to offer incentives to manufacturers for increasing output and incremental sales.

The government has committed nearly 1.97 trillion towards these schemes over five years starting 2021-22.

“Amazon is committed to partner with the government to advance the vision of an Atmanirbhar Bharat. We have pledged to invest $1 billion to digitize 10 million small and medium businesses, help Indian businesses sell worldwide thereby enabling $10 billion in cumulative exports, and create an additional 1 million jobs by 2025," Agarwal said.

Shreya Nandi contributed to the story.

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