Tata to build new iPhone factory, accelerating Apple's local production
Tata Group is gearing up to build one of India's largest iPhone assembly plants in Hosur, Tamil Nadu, per Bloomberg. With plans for 20 assembly lines and 50,000 employees within two years, the facility aims to be operational in 12 to 18 months. This move will boost Apple's efforts to localize its supply chain and strengthen its partnership with Tata.
Diversifying operations and expanding business
The new plant aligns with Apple's strategy to diversify operations beyond China, collaborating with assembly and component manufacturing partners in India, Thailand, Malaysia, and other countries. Tata is expanding its business with Apple, speeding up hiring at its existing Hosur facility that produces iPhone enclosures. Additionally, Tata plans to open 100 retail stores focused on Apple products. Apple has launched two company stores in India, in Mumbai and in Delhi, and is planning three more.
Impact of the production-linked schemes
The production-linked incentive schemes, championed by Prime Minister Narendra Modi, have motivated Apple's key suppliers to increase operations in India. These suppliers are Taiwan's Foxconn Technology Group and Pegatron Corp. As a result, Apple assembled over $7 billion worth of iPhones in India during the last fiscal year, raising India's share of iPhone production to around 7%. The rest are assembled in China.
New plant size and potential government subsidies
The new plant will likely be bigger than Tata's current facility acquired from Wistron Corp., but smaller than Foxconn's largest facilities in China. Apple and Tata may request the Indian government to provide subsidies for the new factory, as it is set to begin production just as previous state-backed financial incentives are due to expire.
