India’s iPhone manufacturing may increase as Tata Sons targets Rs 7,000cr Tamil Nadu Phone Plant

The production of telephones in India is already underway, with Foxconn producing major Chinese telephones for Apple (including the iPhone 11) at its plant in Sriperumbudur, Tamil Nadu. However, most Indian smartphone factories and facilities are still only able to function as assembly lines, reducing the prospect of India for brands such as Apple that are looking for alternative manufacturing and component sourcing destinations outside China.

Tata Sons are reportedly seeking overseas loans worth close to $1 billion or about Rs 7,000-8,000 crore in an attempt to answer this and offer Apple a component manufacturing and sourcing hub in India, which will be invested in what has been described by reports as a “globally scalable” smartphone and component manufacturing facility in Tamil Nadu.

While the latest report is courtesy of ET Prime’s report, the same was suggested in a previous report by Hindu Business Line. The factory is reportedly being set up in Hosur, Tamil Nadu, and 500 acres have already been allocated to the new Tata subsidiary, Tata Electronics, by the state industrial development body to set up a component manufacturing plant there. Apparently, Tata Electronics will take expertise from Titan Engineering and Automation Ltd (TEAL), a fellow Tata organization, which acts as the precision engineering arm behind Tata’s watch and apparel brand, Titan.

Reports indicate that both Tamil Nadu and Karnataka were strong contenders for hosting the ambitious iPhone components factory of Tata Electronics, with the former eventually winning favor, probably also present in the state due to other technology plants such as Foxconn, Samsung, Nokia, Dell, and others.

The government of Tamil Nadu also has an ambitious manufacturing policy for electronic hardware, with plans to contribute $100 billion annually, or 25 percent of India’s electronics exports, by 2025.

While Apple initially started assembling iPhones with the older iPhone SE in India in 2017, it has since increased the scope to now include the iPhone 11 as well. The Indian government has also urged Apple to take advantage of its production-related incentive plans, which aim to encourage foreign brands to move to India as a manufacturing hub, thus setting up an industry that has not yet quite taken off in India. Tata Sons are also likely to take advantage of the same, aiming to reap the government’s incentives, as well as to provide Apple for the first time with wider local manufacturing support in India.