Marking the first time a local company would move into the assembly of iPhones, India’s largest conglomerate, Tata Group is close to an agreement to acquire an Apple Inc. supplier’s factory as soon as August, said the people familiar with the matter.
Tata Group Likely to Takeover Wistron Factory in Karnataka
According to the sources, a takeover of the Wistron Corp. factory in southern Karnataka state which potentially valued at more than $600 million, would cap about a year of negotiations.
The said facility employs more than 10,000 workers presently who work on assembling the latest iPhone 14 model.
Sources talked about Wistron committed to ship iPhones worth at least $1.8 billion from the factory in the fiscal year through March 2024 to win state-backed financial incentives.
Further, it is also planning to triple the plant’s workforce by next year.
Interestingly, Tata is set to honor those commitments as Wistron exits the iPhone business in India.
So far, the Spokespersons for Tata, Wistron and Apple declined to comment.
Significant Boost to Atmanirbhar Bharat and Diversifying Beyond China
It appears that the addition of an Indian iPhone is likely to add momentum to Apple’s efforts to diversify its product base beyond China, this would also build up technology manufacturing in the South Asian nation.
In the three months ended June 30, Wistron exported nearly $500 million in iPhones from India.
Besides this, Apple’s other key Taiwanese suppliers, Foxconn Technology Group and Pegatron Corp., have also ramped up locally.
India has made progress in domestic manufacturing since Prime Minister Narendra Modi set up government programs with lucrative financial incentives to expand production and employment.
Considering the aftermath of the country’s Covid lockdowns and rising tensions between Washington and Beijing, Apple has stepped up efforts to diversify away from China.
This would also give a significant boost for Modi’s efforts to challenge China’s status as the factory of the world as an Indian company entering in making iPhones.
In Addition to this, it may help persuade other global electronics brands to consider production in India to reduce their reliance on China.
When it comes to Tata, it is a 155-year-old company that sells everything from salt to tech services.
The group has sought to make inroads into electronics production and e-commerce, both relatively new territories for the Tata family in the past few years.
