New Delhi

Tata Group is reportedly negotiating to acquire Pegatron's only iPhone manufacturing facility in the country.

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This potential deal indicates Pegatron's scaling back of its partnership with Apple and Tata's expansion in iPhone manufacturing.

If finalised, the agreement will result in Tata holding a minimum of a 65 per cent stake in a joint venture that will oversee the Pegatron plant located near Chennai.

Pegatron will retain the remaining stake and will continue to offer technical support to the joint venture.

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This deal has received Apple's endorsement, as reported earlier by Reuters.

Other media reports suggest Tata intends to manage the joint venture through its Tata Electronics division.

The Pegatron facility in Chennai currently employs around 10,000 workers and has an annual production capacity of 5 million iPhones.

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This plant is Pegatron's last remaining iPhone manufacturing unit following its relinquishment of control over an iPhone plant in China to Luxshare for $290 million last year.

Apple's pursuit to diversify its supply chain beyond China, especially in the backdrop of worsening geopolitical tensions between Beijing and Washington, makes the Chennai Pegatron plant a crucial asset.

For Tata Group, this acquisition supports its plan to strengthen iPhone manufacturing capabilities in India.

Tata Group is not new to iPhone assembly in India. It already operates an iPhone assembly plant in Karnataka, acquired from Taiwan's Wistron last year, and is in the process of constructing another facility in Hosur, Tamil Nadu.

In fact, Pegatron has been simultaneously developing an additional iPhone factory at its Chennai complex.

Talks for the Tata-Pegatron deal reportedly include the acquisition of this new facility as well.

The negotiations between Tata and Pegatron are anticipated to conclude within six months.

As part of the deal, all Pegatron employees in India are expected to transition to the newly formed joint venture.

Currently, Apple's iPhone contract manufacturers in India comprise Tata, Pegatron, and Foxconn.

Analysts estimate that Tata's contribution to Apple's iPhone shipments in India could increase to 20-25 per cent this year, up from 12-14 per cent last year.