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Tata Wants to Build a New iPhone Factory to Speed Up Apple's Growth in India

--A new facility would expedite Apple's efforts to diversify outside of China.

--After purchasing one iPhone manufacturer, Tata wants to expand Apple's company.

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Conglomerate Tata Group intends to capitalize on Apple Inc.'s goals to expand manufacturing in the South Asian nation by constructing one of the largest iPhone assembly plants in India.

According to persons with knowledge of the situation, Tata intends to build the factory in Hosur, in the southern state of Tamil Nadu. Within two years, the plant will probably have roughly 20 manufacturing lines and employ 50,000 people, according to the sources discussing the undisclosed plans who asked not to be identified. The website should be up and running in 12 to 18 months.

As an added bonus, the project would help Apple achieve its goals of localizing its supply chain and strengthening its ties with Tata, which presently operates an iPhone manufacturing facility in the neighboring state of Karnataka that it bought from Wistron Corp. Apple is growing its business outside of China by collaborating with partners in Thailand, Malaysia, India, and other nations to produce components and assemble products.

An Apple representative did not respond to a request for comment, and a Tata representative did not respond either.

 

The Indian company has expanded outside its main areas of software and salt and has taken additional attempts to strengthen its relationship with Apple. At its current Hosur plant, which makes iPhone enclosures, or metal casings, it has increased hiring. Additionally, Tata announced that it will open 100 retail locations selling just Apple goods. Apple, on the other hand, has launched two stores nationwide and has plans to open three more.

Production-related subsidies from Prime Minister Narendra Modi have encouraged major Apple suppliers, including Pegatron Corp. and Taiwan's Foxconn Technology Group, to expand in India. As a result, India was able to construct more than $7 billion worth of iPhones during the previous fiscal year, contributing to the country's roughly 7% production share. China, which produced them all up until a few years ago, is where the remainder are put together.

 

The new facility will be mid-sized compared to other iPhone manufacturers worldwide. It would probably be smaller than Foxconn's largest China factories, which employ hundreds of thousands of workers, and larger than the one Tata purchased from Wistron, which employs more than 10,000 people.

Given that the new factory is anticipated to start production right before the previous round of state-backed financial incentives expire, Apple and Tata may lobby the government to grant subsidies for the facility.