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.