Tata Group Likely To Be First Indian iPhone maker; Deal Expected To Close In August

Tata Group is close to signing an agreement to acquire a supplier factory for Apple making it the first time that a local company would move into the assembly of iPhones, reported Bloomberg quoting sources. The deal is expected to be closed as soon as August.

The takeover of the Wistron Corp factory in southern Karnataka state would potentially be worth over $600 million and would need close to a year of negotiations, the people with knowledge on the matter told Bloomberg. The facility in Karnataka has close to 10,000 workers that solely work on the assembly of the latest iPhone 14 models.

The factory has set a target 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, claimed the report quoting sources. Wistron also had plans to triple the plant workforce by next year.

Tata Group is set to honor the commitments as Wistron is to exit the iPhone business in India.

Apple to diversify iPhone production

This could give Apple the momentum to diversify the product base of iPhone beyond China and focus on building technology manufacturing in the South Asian nation. This decision to expand outside China arose due to the aftermath of China's Covid lockdowns and the rising tensions between Beijing and Washington.

Wistron exported nearly close to $500 million in iPhones from India till June 30. Additionally, the tech giant's key Taiwanese suppliers like Foxconn Technology Group and Pegatron Corp have also ramped up local production.

Since Indian Prime Minister Narendra Modi set up different government programs the country has made progress in domestic manufacturing. These government programs have lucrative financial incentives and will help expand production and employment.

Boost to get global electronic brands to produce in India

If Tata Group does decide to produce iPhones, this would be a severe boost to Modi's effort to challenge China's status as a factory of the world. It may also help convince other global electronics brands to consider India for their production and reduce their dependence on China.

Tata Group is a 155-year-old conglomerate that sells almost everything from salt to tech services. The group in the past few years has been looking for means to grow in electronic production and e-commerce which are relatively new territories for the Tata Group.

The company is already making the metal background of the iPhone in the factory in Tamil Nadu.