Tata Group plans to produce iPhones in India

Tata to produce iphone in India

Apple’s Suppliers –

  • To achieve the success, Apple doesn’t depend on its own manufacturing alone. It has over 200 suppliers that it relies on for procuring components for assembly.
  • Each year it releases progress report outlining its suppliers relationship efforts as well as a list of it’s top 200 suppliers, which account for 98% of its procurement. Some are Taiwan’s Foxconn, Wistron, Pegatron; China’s Goertek, Luxshare and USA’s Intel, Qualcomm.

What has happened?

  • Tata Group is in talks with a Taiwanese supplier of Apple Inc. to establish an electronics manufacturing joint venture in India, seeking to assemble iPhones in the South Asian country.
  • The discussions with Wistron Corp. are aimed at making Tata a force in technology manufacturing and the Indian salt-to-software conglomerate wants to tap the Taiwanese company’s expertise in product development, supply chain and assembly.

To Challenge China –

  • If successful, the pact could make Tata the first Indian company to build iPhones, which are currently mainly assembled by Taiwanese manufacturing giants like Wistron and Foxconn Technology group in China and India.
  • An Indian company making iPhones would be a massive boost for the country’s effort to challenge China, whose dominance in electronics manufacturing has been jeopardized by rolling Covid lockdowns and political tensions with the US. Apple is already shifting base from China to Vietnam and India.
  • It could also persuade other global electronics brands to consider assembly in India to reduce their reliance on China at a time of increasing geopolitical risks.

When Wistron started in India?

  • Wistron began making iPhones in India in 2017, after years of efforts by Apple to add manufacturing capabilities in the country.
  • The Taipei based company currently assembles iPhones at its plant in the state of Karnataka in southern India

Any deal finalised by Tata?

  • The structure of the deal and details such as shareholdings are yet to be finalized and talks are ongoing.
  • The plan could entail Tata buying equity in Wistron’s India operations or the companies could build a new assembly plant or they could also execute both those moves.
  • It wasn’t immediately clear if Apple was aware of the talks, which come at a time the US tech giant is looking to diversify more production away from China and deepen its supply chain in India.
  • Apple is known to work with local companies in regions where it sets up manufacturing bases- but assembling iPhones is a complicated task that entails meeting the US company’s tight deadlines and quality controls.

5 times jump in production if Tata produces iphone in India –

  • The new venture aims to eventually increase the number of iPhones assembled by as much as five times from what Wistron currently builds in India.
  • A partnership would also likely result in Mumbai based Tata obtaining a share of Wistron’s manufacturing business beyond smartphones.

Tata also wants to Diversify –

  • Tata Group Chairman Natarajan Chandrasekaran has said electronics and high-tech manufacturing are key focus areas for the company, India’s top conglomerate with revenue of about $128 billion
  • Industries such as software, steel and cars accounts for much of Tata’s business, but it has taken early steps in the smartphone supply chain by starting to manufacture iPhone chassis components in Southern India.
  • For Wistron’s Indian business, struggling with losses, a pact with Tata would give it a formidable local partner with deep pockets.
  • Tata’s reach also spans automobiles including electric vehicles, an area many of the world’s tech giants are eager to expand in.

In conclusion, the promise of India’s billion strong consumer market and Prime Minister Narendra Modi’s financial incentives for tech production, have driven Apple’s other key contract manufacturers Foxconn and Pegatron Corp. To also expand in the country.

Sodhi Gautam

Sodhi Gautam

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