Tata Group is in talks with a Taiwanese supplier to Apple Inc. to set up an electronics manufacturing company in India, looking to assemble iPhones in South Asian countries. Discussions with Wistron Corp. Aiming to make Tata a technology manufacturing powerhouse, the Indian salt-and-software company wants to harness the Taiwanese company's expertise in product development, supply chain and assembly, the people said. If successful, the deal could make Tata the first Indian company to produce iPhones, which are currently outsourced to China and India by major Taiwanese companies such as Wistron and Foxconn Technology Group.

An Indian company that makes iPhones will provide significant support in the country's efforts to challenge China, whose dominance in electronics manufacturing has been eroded by the Covid-19 lockdown and political conflict with the United States. It may also make other global electronics brands consider assembly in India to reduce dependence on China at a time of rising geopolitical risks.

Terms of the agreement and details such as the stakes have not been finalized, and discussions are ongoing, the people said, declining to be named because the discussions are confidential. The plan could include Tata buying shares in Wistron's India operations or the company building a new assembly plant, one of the people said. And they can do both these moves, the person said. It was not immediately clear whether Apple was aware of the talks, which come at a time when the US technology giant is looking to increase its production in China and deepen its supply chain in India.

Apple is known for working in local factories and regions where it has established manufacturing bases, but assembling iPhones is a complex task that involves meeting American factory deadlines and quality control. A representative for Wistron declined to comment. Tata and Apple did not respond to requests for comment. The innovation aims to increase the number of iPhones assembled by up to five times compared to what Wistron is currently building in India, one of the people said.

The tie-up will also allow Mumbai-based Tata to get part of Wistron's manufacturing business beyond smartphones, the people said. Tata Group CEO Natarajan Chandrasekaran said that electronics and high-tech manufacturing are important areas for the company, India's largest company with a turnover of $128 billion.

Industries such as software, machinery and automobiles make up a large part of Tata's business, but it has taken its first step into the mobile phone supply chain by starting iPhone chassis manufacturing in southern India. For Wistron's Indian business, which has been struggling with losses, the deal with Tata will provide it with a strong local partner with deep pockets.

Tata's arrival also covers automobiles, including electric vehicles, an area many of the world's tech giants are eager to expand. Wistron started manufacturing iPhones in India in 2017, after several years of Apple's efforts to add manufacturing capacity in the country. The Taipei-based company currently assembles iPhones at its factory in the southern Indian state of Karnataka.

The promise of a $1.4 billion Indian consumer market and Prime Minister Narendra Modi's financial stimulus for technology production have prompted Apple's other contractors, Foxconn and Pegatron Corp., to expand in the country. But Indian workers and companies are not quick to accept the highly regulated practices that Apple requires from its suppliers: Since iPhone assembly began in India five years ago, workers have protested over costs Unpaid work and living and working conditions in two important activities.