Tata Group, one of India’s largest and most diversified conglomerates, is set to double its iPhone assembly capacity in India within two years. This expansion is driven by Apple’s increasing demand for Indian-made iPhones, as the US tech giant seeks to reduce its reliance on China and tap into the growing Indian market. The expansion will also create thousands of jobs and boost India’s economy.
India’s iPhone Production and Expansion Plans
Apple has been ramping up its iPhone production in India since 2017, when it started assembling the iPhone SE model at a plant run by Wistron Corp, one of its key suppliers. Since then, Apple has added more models and suppliers to its Indian operations, including Foxconn and Pegatron, two other Taiwanese iPhone manufacturers. According to a report by Counterpoint Research, Apple produced about 3.9 million iPhones in India in 2020, accounting for about 2% of its global output.
Apple’s demand for Indian-made iPhones is expected to grow significantly in the coming years, as it plans to export more iPhones from India to other markets, especially in Europe and the Middle East. Apple also wants to increase its share of the Indian smartphone market, which is dominated by Chinese brands such as Xiaomi and Vivo. India is the world’s second-largest smartphone market, with over 500 million users and a huge potential for growth.
To meet Apple’s demand, Tata Group is gearing up for a massive expansion of its iPhone-casing unit in Hosur, Tamil Nadu. The unit, which is operated by Tata Electronics, a subsidiary of Tata Sons, was established in 2020 with an investment of Rs 5,000 crore and employs over 15,000 people. The unit produces metal casings for various iPhone models, such as the iPhone 12 and the iPhone 13.
According to sources familiar with the development, Tata Electronics plans to double the size and capacity of the Hosur unit by 1.5 to 2 times, which could take 12 to 18 months to complete. The expansion is expected to increase the employment figures from 25,000 to 28,000. A senior government official told ET that the expansion could be entirely for Apple phone components, but manufacturing for other premium brands cannot be ruled out.
In addition to the Hosur unit, Tata Group is also set to take over the iPhone assembly plant near Bengaluru, which is currently run by Wistron. Wistron’s board approved the sale of its Indian subsidiary, Wistron InfoComm Manufacturing (India) Private Ltd, to Tata for $125 million (Rs 1,040 crore) in October 2021. The deal is expected to be completed by the end of 2021 or early 2022.
The acquisition of Wistron’s plant will make Tata Group the first Indian company to manufacture iPhones in the country. The plant, which has a capacity of producing about 2 million iPhones per year, was shut down in December 2020 after a violent workers’ protest over unpaid wages and poor working conditions. Wistron has since resumed operations at the plant, but with reduced output and staff.
Tata Group’s expansion plans are not limited to iPhones. According to reports, Apple is also looking to add MacBooks and iPads to its production portfolio in India in the next few years. Tata Group is likely to be Apple’s chosen partner for these products as well, as it has the expertise and resources to handle complex and high-end electronics manufacturing.
Impact of the Expansion
Tata Group’s expansion of its iPhone plant in India will have a positive impact on the country’s economy and employment. According to a study by the Indian Cellular and Electronics Association (ICEA), India can create 10 million jobs and generate $100 billion in exports by 2025 if it becomes a global hub for mobile phone manufacturing.
Tata Group’s expansion will also boost India’s electronics manufacturing sector, which has been growing rapidly in recent years, thanks to various government initiatives and incentives. India aims to become a net exporter of electronics by 2025 and reduce its dependence on imports, especially from China.
Moreover, Tata Group’s expansion will strengthen India’s strategic partnership with Apple, which is one of the world’s most valuable and influential companies. Apple’s presence in India will enhance the country’s innovation and technology ecosystem, and attract more foreign direct investment and talent. Apple’s CEO Tim Cook has praised India’s potential and vision and expressed his commitment to invest and expand in the country.
Tata Group’s expansion of its iPhone plant in India is a win-win situation for both the Indian conglomerate and the US tech giant. It will help them achieve their respective goals of diversifying their businesses, increasing their market share, and reducing their risks. It will also benefit India’s economy, employment, and electronics manufacturing sector. Tata Group’s expansion of its iPhone plant in India is a milestone in the country’s journey to become a global leader in mobile phone production.