KEY POINTS
- The Indian conglomerate reportedly plans to construct a facility in the southern Indian state of Tamil Nadu
- The plant is expected to have about 20 assembly lines and employ 50,000 workers in two years
- It will also boost Apple's efforts to diversify operations beyond China
Apple's ambition to increase manufacturing in India is getting a push with Tata Group's new plans for an iPhone assembly unit.
The Indian conglomerate is looking to construct the factory in the southern state of Tamil Nadu, Bloomberg reported, citing sources. With plans to have about 20 assembly lines and employ 50,000 workers in two years, the plant is anticipated to be operational in 12 to 18 months.
Tata has a 155-year-old legacy and comprises 30 companies across 10 business verticals, selling everything from consumer goods like salt and tea powder to cars and tech services. Tata presently oversees an iPhone manufacturing unit that it took over from Taiwanese supplier Wistron in the state of Karnataka.
Tata Group's latest move could give a boost to Apple's efforts to diversify its operations beyond China. The Cupertino, California-based company has shown great interest in including India, Thailand, Vietnam and other markets in its supply chain and has been fostering partnerships with key players in these countries.
Apple analyst Ming-Chi Kuo said last month that Apple was planning to develop its iPhone 17 in India in 2024.
"It will be the first time for Apple to begin development of a new iPhone model outside of China. The standard iPhone is chosen for its lower-difficulty design development to reduce design risk," the analyst wrote in a post on online publishing platform Medium.
As per the current plans, the proportion of iPhones made in India will increase from 12–14% in 2023 to 20–25% by next year, he noted.
Apple's partnership with the Tata Group made the latter the first Indian company to move into the assembly of iPhones.
"The fact that Apple trusted them to make one of the most popular products in the world gives a big boost to confidence in India's manufacturing capabilities, especially when it comes to complex electronic products like the iPhone," Abhijeet Mukherjee, founder of Guiding Tech before it was acquired by U.S.-based Padre Media, previously told International Business Times.
However, India still has a long way to go in order to compete with China and position itself as a global manufacturing hub.
"It is still early days for India's silicon industry," Varun Krishnan, editor-in-chief of FoneArena, told IBT in July. "Some of the components still come from multiple countries. India still does not have a fab unit locally which could reduce the complexity and costs of manufacturing locally."
"India's manufacturing certainly needs to capture a much bigger share of its GDP if it has any hopes of toppling China in the long term," Mukherjee added.
