Tata Group Nears Agreement to Manufacture iPhones in India

According to sources familiar with the matter, Tata Group, the biggest conglomerate in India, is nearing a deal to purchase a factory belonging to an Apple Inc. supplier. This move, expected to take place in August, would be significant as it would be the first instance of a local company entering the iPhone assembly business.

The takeover of Wistron Corp.’s plant in southern Karnataka state, potentially worth more than $600 million, would cap negotiations for about a year, said the people, who asked not to be named because the matter is private. The factory employs more than 10,000 workers who assemble the latest iPhone 14 model.

Wistron has committed to ship at least $1.8 billion worth of iPhones from the factory between the fiscal year and March 2024 to receive government-backed financial incentives, the people said. There were also plans to triple the factory’s personnel by next year. Tata plans to honor these commitments when Wistron exits its iPhone business in India.

Spokespeople for Tata, Wistron and Apple declined to comment.

The addition of an Indian iPhone is likely to add momentum to Apple’s efforts to diversify its product base outside of China and build technology manufacturing in the South Asian nation. Wistron exported nearly $500 million in iPhones from India in the three months ended June 30, and Apple’s other key Taiwanese suppliers, Foxconn Technology Group and Pegatron Corp., have also grown locally.

India has made progress in domestic manufacturing since Prime Minister Narendra Modi instituted government programs with lucrative financial incentives to expand production and employment. Apple has stepped up efforts to diversify away from China following the country’s Covid lockdowns and rising tensions between Washington and Beijing.

The Indian iPhone company could prove to be a major boost to Modi’s efforts to challenge China’s status as the world’s factory. It may help convince other global electronics brands to consider manufacturing in India to reduce their dependence on China.

The 155-year-old Tata Group sells everything from salt to technical services. In recent years, the group has sought to make inroads into electronics manufacturing and e-commerce, both relatively new areas for the Tata family.

It already manufactures the body of the iPhone, or the metal body of the device, in a factory spread over hundreds of acres in the state of Tamil Nadu. Tatas are also promoting chipmaking ambitions, chairman N Chandrasekaran has said earlier.