Tata is planning new iPhone factory in Chennai, India to speed up Apple’s India expansion

Tata Electronics Private Limited the electronics manufacturing division of the Tata conglomerate, is planning to establish one of India’s largest iPhone assembly plants, and capitalise on Apple push to expand its manufacturing presence in the country, and away from China.

According to a report by Bloomberg, people close to the development believe that Tata wants to set the factory up in Hosur, in Tamil Nadu. Tata plans to set up around 20 assembly lines and employ about 50,000 workers within the next two years.

The objective is to make the plant operational within 12 to 18 months, the same sources told Bloomberg.

Tata’s initiative aligns with Apple’s strategy to localise its supply chain and strengthen its collaboration with Tata, and other local manufacturers, rather than only relying on foreign players setting up shop in India. Tata already owns an iPhone factory, which they acquired from Wistron Corp a couple of months ago. Tata’s Wistron factory in situated in the neighbouring state of Karnataka.

Apple’s moves to diversify its operations away from China involve partnerships for assembly and component manufacturing in India, Thailand, Malaysia, and other countries.

The new plant is expected to play a significant role in Apple’s efforts to increase iPhone production in India. Tata has been actively expanding its engagement with Apple, accelerating hiring at its existing Hosur facility, where it manufactures iPhone enclosures.

Apart from its push to set up new factories for Apple, Tata also plans to open and operate about 100 stores exclusively for Apple and their products, further helping the Cupertino-based tech giant in increasing their retail footprint in the country.

This will be a major step for Tata as well, as it moves towards diversifying its business beyond its traditional ventures ranging from salt to software.

The move comes in the wake of Prime Minister Narendra Modi’s production-linked subsidies, which have encouraged key Apple suppliers like Foxconn Technology Group and Pegatron Corp. to increase their operations in India.

In the previous fiscal year, Apple assembled over $7 billion worth of iPhones in India, increasing the country’s share of the device’s production to about 7 per cent. However, Apple plans to soon produce at least 25 per cent of all iPhones sold globally, in Indian factories.

The new plant is anticipated to be mid-sized on a global scale among iPhone factories, positioned between Tata’s existing facility and the large-scale facilities operated by Foxconn in China.

As the new plant is expected to commence production just as previous state-backed financial incentives are set to expire, Apple and Tata may seek government subsidies for this venture.

(With inputs from agencies)