Tata Group's big 'Apple' bite: Indian giant closes in on iPhone manufacturing deal

Tata Group, a prominent Indian conglomerate, is reportedly nearing an agreement to acquire a factory in Karnataka, India, owned by Wistron Corp., an Apple supplier. This move could potentially make Tata Group the first Indian company to manufacture iPhones. According to sources cited by Bloomberg, the acquisition could be finalized as early as August and is estimated to be valued at over $600 million. The factory, currently employing over 10,000 workers, is responsible for assembling Apple's iPhone 14.

While Wistron plans to exit the business, Tata Group has ambitious plans to ship approximately $1.8 billion worth of iPhones from this facility. Initially, Wistron aimed to achieve similar production levels to gain financial incentives from the Indian government.

Companies seek alternative production locations

This development occurs as several U.S. tech companies explore diversifying their hardware manufacturing beyond China. The ongoing trade tensions between the United States and China, coupled with restrictions imposed on tech companies by both countries, have prompted firms to seek alternative production locations. Additionally, China's strict COVID-19 lockdowns, part of its zero-COVID policy, have significantly impacted Apple suppliers, leading to disruptions in the supply chain. In October 2022, for instance, workers from Apple's largest iPhone assembly factory in Zhengzhou reportedly escaped due to a lockdown.

Apple, Tata Group, or Wistron have issued no official statements regarding the acquisition. Nevertheless, the Indian government has recently introduced various programs to encourage local manufacturing. Simultaneously, Apple has been actively seeking to diversify its iPhone production beyond China, exploring opportunities in other South Asian countries. Other major Apple suppliers, such as Foxconn Group and Pegatron Corporation, have also expanded their production capabilities in response to this shift.

Big boost for 'Make in India' initiative

The potential production of iPhones by an Indian company holds the potential to inspire other global firms to consider manufacturing in India as a means to reduce their reliance on China. India's rising stature as a manufacturing hub could offer strategic advantages and contribute to a more diversified supply chain.

A previous report by TrendForce indicated that the upcoming iPhone 15 and iPhone 15 Plus models might also be manufactured in India by the Tata Group. However, it suggested that Tata Group would receive smaller orders for these models. This implies that India could be among the first countries to receive shipments of the new iPhone series, expected to launch in September this year.

(With Inputs from Agencies)