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Tata’s Bold Move: Constructing India’s Largest iPhone Assembly Plant in Partnership with Apple

In a strategic move to strengthen Apple’s manufacturing presence in India, Tata Group is gearing up to build one of the country’s most extensive iPhone assembly plants. The conglomerate is eyeing the southern Tamil Nadu state, specifically Hosur, as the location for this ambitious venture. With plans to initiate operations within the next 12 to 18 months, Tata aims to create a facility housing approximately 20 assembly lines and providing employment to a substantial workforce of 50,000 within two years.

The plant would bolster Apple’s efforts to localise its supply chain and strengthen its partnership with Tata, which already has an iPhone factory it acquired from Wistron. in the neighbouring Karnataka state. Apple is diversifying its operations away from China by working with assembly and component manufacturing partners in India, Thailand, Malaysia and elsewhere.

This endeavor aligns with Apple’s broader vision of diversifying its manufacturing operations beyond China, a move driven by the desire to localize its supply chain. The proposed plant will not only cater to Apple’s increasing demand for iPhones but will also solidify the partnership between Tata and Apple, building on the foundation laid by Tata’s acquisition of an iPhone factory from Wistron in the neighboring Karnataka state.

While both Apple and Tata have remained tight-lipped about the project, industry insiders suggest that the new facility is part of Tata’s larger strategy to expand its collaboration with Apple. In addition to the upcoming assembly plant, Tata has accelerated hiring at its existing Hosur facility, which currently produces iPhone enclosures or metal casings. The conglomerate has also committed to launching 100 retail stores exclusively focused on Apple products, a move that underscores its commitment to the partnership.

The Indian conglomerate has taken other steps to increase its business with Apple and expand beyond its traditional businesses that range from salt to software. It has accelerated hiring at its existing facility in Hosur, where it produces iPhone enclosures, or metal casings. Tata has also said it’ll launch 100 retail stores focused on Apple products. For its part, Apple has opened two stores in the nation and is planning three more.

Prime Minister Narendra Modi’s production-linked subsidies have spurred Apple’s key suppliers such as Taiwan’s Foxconn and Pegatron to ramp up in India. That helped Apple assemble more than $7 billion of iPhones in India in the previous fiscal year, increasing the country’s share of the device’s production to about 7 percent. The rest are assembled in China, which until a few years ago made all of them.

This expansion aligns with the Indian government’s push for increased manufacturing through Prime Minister Narendra Modi’s production-linked subsidies. Notably, Apple’s key suppliers, including Foxconn and Pegatron, have ramped up their operations in India, contributing to the assembly of over $7 billion worth of iPhones in the previous fiscal year. This not only reflects Apple’s commitment to diversifying its manufacturing base but also signals a significant boost for India’s share in iPhone production, which now stands at around 7%.

The proposed iPhone assembly plant in Tamil Nadu is set to be mid-sized in comparison to global iPhone factories. While it surpasses the scale of Tata’s Wistron-acquired facility, which employs over 10,000 people, it falls short of the colossal size of Foxconn’s largest facilities in China, known for employing hundreds of thousands.

With the manufacturing landscape rapidly evolving in India, both Apple and Tata are likely to leverage their influence to secure government subsidies for the new facility. The timing is particularly strategic, coinciding with the expiration of previous state-backed financial incentives, offering an opportune moment for negotiations and securing support for this transformative project.

As Apple continues its retail expansion in India, with plans for three more stores in addition to the existing two, and Tata intensifies its efforts to enhance its business with Apple, the collaboration between these two corporate giants is poised to reshape the technology manufacturing landscape in the country. The proposed iPhone assembly plant in Tamil Nadu is not merely a facility; it represents a pivotal step towards India becoming a significant hub in Apple’s global supply chain.

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