Tata Group may soon be first Indian firm to manufacture iPhone
Tata Group, India’s largest conglomerate, could soon be India’s first firm to manufacture Apple’s marquee product, the iPhone. Bloomberg has reported that Tata is “close to an agreement” to acquire one of Apple’s suppliers, Wistron’s production facility as soon as August.
Wistron’s factory, situated in Karnataka, is valued at over $600 million (roughly Rs 4,946 crore) and employs more than 10,000 workers. It has been a key facility in the production of Apple’s latest iPhone 14, as well as previous iPhone models. However, several previous incidents ranging from low-quality production and workers’ strike over their employment conditions have raised concerns and have attracted so much as probation from Apple. Wistron, consequently, decided to sell its iPhone assembly factory after it failed to generate profit in line with Apple’s terms.
Even though the takeover of Wistron’s facility is set to become underway, it has made commitments to Apple. The supplier will ship iPhone units worth $1.8 billion from its Karnataka factory in the fiscal year through March 2024. Doing that will also make Wistron eligible for state-backed incentives, the report added.
If the takeover comes through, Tata will honour these commitments as part of its deal with Wistron, which will not focus on its core IT manufacturing operations in Vietnam and Mexico. The takeover would also mark Wistron’s exit from India after more than 15 years. Wistron entered India in 2008 with a repair facility.
The takeover of the Wistron facility by the Tata Group will be a shot in the arm for the Indian government’s Make in India programme. Over the past few years, the government led by Prime Minister Narendra Modi has lured foreign companies to begin manufacturing in India by offering financial incentives.
Apple is one of those companies, which now manufactures all its leading iPhone models in India. The addition of Tata Group to its group of suppliers will not only diversify Apple’s production base but also enable it to minimise its dependence on China. Apple began moving out production of some of its production outside of China following pandemic-induced restrictions in the country and tensions between Washington and Beijing.
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