Tata Group, India’s largest conglomerate, is close to a deal as soon as August to acquire an Apple Inc supplier’s factory, marking the first time that a local company will step into the assembly of iPhones. According to people familiar with the matter.
The acquisition of the Wistron Corp factory in southern Karnataka state, which is potentially worth more than $600 million, will last about a year of negotiations, the people said, speaking on condition of anonymity because the matter is private. The facility employs over 10,000 workers, who assemble the latest iPhone 14 models.
Wistron has committed to dispatch at least $1.8 billion worth of iPhones from the factory in the fiscal year to March 2024 to qualify for state-backed fiscal incentives, the people said. It also plans to triple the plant’s workforce by next year. Tata is set to honor those commitments as Wistron exits the iPhone business in India.
The inclusion of the Indian iPhone is likely to accelerate Apple’s efforts to diversify its product base beyond China and build up technology manufacturing in the South Asian nation. Wistron exported about $500 million worth of iPhones from India in the three months ended June 30, and Apple’s other major Taiwanese suppliers, Foxconn Technology Group and Pegatron Corp, have also grown locally.
India has made strides in domestic manufacturing since Prime Minister Narendra Modi set up a government program with attractive financial incentives to expand production and employment. Apple has stepped up efforts to diversify away from China following the country’s Covid lockdown and rising tensions between Washington and Beijing, according to Bloomberg.
An Indian company making iPhones could prove to be a significant boost to Modi’s efforts to challenge China’s status as the factory of the world. This may help persuade other global electronics brands to consider manufacturing in India to reduce their dependence on China.
The 155-year-old Tata Group sells everything from salt to technology services. Over the years, the group has tried to make inroads into electronics manufacturing and e-commerce, which are relatively new areas for the Tata family.
It already makes the iPhone chassis, or the metal backbone of the device, at its factory spread over hundreds of acres of land in the state of Tamil Nadu. Chairman N. Chandrasekaran had earlier said that Tata also fosters chip manufacturing ambitions.
