India’s Tata Set to Buy iPhone Plant to Expand Its Role As Apple Supplier

Indian conglomerate Tata Group is nearing a deal to buy a major plant in southern India to become the country’s first homegrown iPhone manufacturer. The company has been in talks with the factory’s owner, Taiwan’s Wistron, and intends to complete the acquisition by the end of March. The talks have centered on Tata taking a majority in a joint venture between the two companies. Tata is set to oversee the main manufacturing operation, with support from Wistron.

Apple’s iPhones are mainly assembled in China by Taiwanese manufacturers like Foxconn and Wistron, but the tech giant has been looking to diversify its manufacturing capacity outside China. On the other hand, India has been scrambling to create local contenders to compete with China’s dominance in electronics manufacturing, which has come under risk by political tensions with the United States and Covid-related disruptions.

The Indian conglomerate aims to complete a due diligence process by March 31 so that its Tata Electronics arm can formally take over Wistron’s position in a program that gives it government incentives. The next series of incentives will begin from April 1, at the start of India’s financial year.

The purchase is expected to be worth more than $600 million if Wistron meets the requirements to receive government incentives for the current financial year.

Wistron is one of three Taiwanese iPhone manufacturers in India, along with Foxconn and Pegatron. It has sought to diversify its business beyond thin-margin iPhone manufacturing into areas such as servers, agreeing to sell its iPhone production business in China to a competitor in 2020.

While Wistron is planning to exit iPhone manufacturing in India, its Taiwanese competitors are looking to expand iPhone production lines.

If the acquisition goes through, Tata will take over Wistron’s all eight iPhone production lines, as well as the plant’s 10,000 employees. Wistron would continue as a service partner for iPhones in India.

Tata has taken other steps to increase its business with Apple. It has accelerated hiring in its factory in Hosur, near Bangalore, where it produces iPhone components. Tata could add iPhone manufacturing lines at the factory in the coming years. Tata has also announced that it will launch 100 Apple stores in the country.

In the past couple of years, company Chairman Chandrasekaran has accelerated efforts to make the conglomerate more tech-centric with a series of e-commerce initiatives. The group is also set to enter chipmaking, Chandrasekaran said last year.

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