Beijing: The Tata group is in talks with an Apple supplier in Taiwan to form an electronics manufacturing joint venture in India with the goal of assembling iPhones in the South Asian country.
According to people familiar with the matter, discussions with Wistron Corp are aimed at making Tata a force in technology manufacturing, and the Indian salt-to-software conglomerate is looking to tap the Taiwanese company's expertise in product development, supply chain and assembly .
If the agreement is successful, Tata will be the first Indian company to manufacture an iPhone, which is currently mainly assembled in China and India by Taiwanese manufacturing giants such as Wistron and Foxconn Technology Group.
An Indian company producing iPhones will give a big boost to India's efforts to challenge China, whose dominance in electronics manufacturing is threatened by the Covid lockdown and political tensions with the US.
This could persuade other global electronics brands to consider assembly in India to reduce their dependence on China at a time when geopolitical risks are rising.
The structure and details of the deal, such as the shareholding, have not yet been finalized, and talks are underway, according to the people, who declined to be identified because the talks are private.
According to one of the sources, the plan could include Tata buying equity in Wistron's India operations or companies building a new assembly plant. As per the source, they can pull off both the moves as well.
It was unclear whether Apple was aware of the discussions, which have come at a time when the US tech giant is trying to diversify its production away from China and strengthen its supply chain in India.
Apple is known for collaborating with local businesses in areas where it sets up manufacturing bases, but assembling iPhones is a daunting task that requires the US company to meet strict deadlines and quality controls.
A Wistron representative declined to comment. Requests for comment from Tata and Apple were not returned.
According to one of the people involved, the new venture aims to eventually increase the number of iPhones manufactured by Wistron in India to five times. According to sources, as a result of the partnership, Mumbai-based Tata will acquire a stake in Wistron's manufacturing business apart from smartphones.
Tata Group Chairman Natarajan Chandrasekaran has said that electronics and hi-tech manufacturing are key focus areas for the company, which is India's largest conglomerate with revenues of around $128 billion.
Tata's business is dominated by industries such as software, steel and automobiles, but it has taken early steps in the smartphone supply chain by starting manufacturing iPhone chassis components in southern India.
A deal with Tata would provide Wistron's struggling Indian business with a strong local partner with deep pockets.
Tata's reach extends to automobiles, including electric vehicles, an area in which many of the world's technology giants are eager to expand.
After years of efforts by Apple to expand manufacturing capabilities in the country, Wistron began manufacturing iPhones in India in 2017. The Taipei-based company currently assembles iPhones at its plant in the southern Indian state of Karnataka.
Prime Minister Narendra Modi's promise of India's 1.4-billion-person consumer market, along with Prime Minister Narendra Modi's financial incentives for tech production, has prompted Apple's other major contract makers, Foxconn and Pegatron Corp, to expand in the country as well.
Still, India's workforce and factories have struggled to adopt the harsh practices that Apple expects from its suppliers: In two notable incidents since iPhone assembly began in India five years ago, workers have found low wages and low wages. Have rebelled over poor living and working conditions.