Tata Group bids to become India’s top domestic iPhone maker

Tata Group bids to become India’s top domestic iPhone maker

Tata Group bids to become India’s top domestic iPhone maker

Tata Group, India’s largest multinational conglomerate, is reportedly in talks with Taiwan’s Wistron Corporation to buy the latter’s $600 million iPhone manufacturing plant in Karnataka, India.

If the deal is finalized quickly, as expectedTata will become the first Indian producer of Apple’s flagship product.

Bloomberg News Monday quoted “two people familiar with the process” as saying the deal should be done by the end of March. According to the sources, a few final issues of the takeover are being worked out, with the most likely final arrangement putting Tata in charge of manufacturing at the factory “with support from Wistron”.

Additionally, finalizing the deal at the end of March will make Tata and Wistron eligible to receive certain incentives from the Indian government, which are distributed in a fiscal round that begins April 1.

“Tata’s deal would advance India’s efforts to create local competitors to challenge China’s dominance in electronics, which has been challenged by political tensions with the United States and related obstacles. to Covid,” Bloomberg observed.

The Associated Press

Customers shop at an Apple Store on the first day of the Apple iPhone 14 sale in Beijing, China, September 16, 2022. (AP Photo/Mark Schiefelbein, File)

The Karnataka plant covers 2.2 million square feet and has approximately 10,000 employees, many of whom are highly skilled electronic engineers. Wistron’s expertise is presumably needed to ease the transition, although Tata has people with iPhone experience as it already runs an iPhone component factory in the same general area. Tata also plans to open around 100 Apple retail stores, starting in the next few months.

Wistron is one of many Taiwanese companies that produce iPhones for Apple. Most of them are to attempt to move at least some of their operations from China to other locations in India and Vietnam, a supply chain diversification effort that accelerated after the coronavirus lockdowns in China cause an incredible disaster at Foxconn’s massive factory in Zhengzhou.

Tata, a huge and diverse Mumbai-based conglomerate that manufactures, ships or sells just about anything, is would have eager do more business with Apple and demonstrate that India can replace China as a manufacturing hub. Tata also sees an opportunity to curry favor with Indian consumers by offering domestically produced iPhones at lower prices.

indians WION News Noted Monday that Apple exported more than $2.5 billion worth of Indian-made iPhones between April and December 2022, roughly doubling exports from the previous fiscal year.

Foxconn and Wistron each accounted for about $1 billion of those exports, while another Taiwanese manufacturer, Pegatron Corp., accounted for the remaining $500 million.

Even as India’s iPhone exports have grown, China’s share of global production has risen from around 47% before the pandemic to 36% in 2021. Meanwhile, India could account for up to 25% of global iPhone production by 2025.

WION cited these numbers as evidence that “some of the western tech companies are leaving China in terms of production.”

The Associated Press

In this Saturday, August 1, 2020, file photo, people walk past an image of an iPhone displayed at an Apple store in Ahmedabad, India. (AP Photo/Ajit Solanki, File)

On Wednesday, Indian Prime Minister Narendra Modi vaunted his country’s strong “macroeconomic fundamentals,” which stem from its “strong democracy, young demographics, and political stability,” for winning praise from the International Monetary Fund (IMF) and the World Bank.

“We have opened up strategic sectors like defence, mining and space for the private sector,” Modi told an investment forum in Indore.

The IMF last week called India a “relative bright spot in the global economy today” because it “is growing at rates significantly above the average of its peers”.

“Macroeconomic policies are reacting to significant headwinds, with fiscal policy measures supporting vulnerable groups and monetary policy tackling persistently high inflation,” the IMF said, advising India to further develop its manufacturing sector. in order to reach the next level of growth.

The World Bank said on Wednesday it expects India’s economic growth to slow a little in the coming financial year, slowing to 6.6% from 6.9% this year, a growth unexpected, largely due to the “global economic slowdown and growing uncertainty”.

The World Bank backed the IMF’s advice to India to spend more on infrastructure and “business facilitation” to develop its manufacturing sector.

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