Tata Group is gearing up to construct one of India's largest iPhone assembly plants, aligning with Apple Inc.'s strategy to expand its manufacturing footprint in the country, as per a Bloomberg report.

The conglomerate plans to build the factory in Hosur, located in the southern state of Tamil Nadu, sources told the publication. The facility is anticipated to accommodate around 20 assembly lines and aims to employ around 50,000 workers within the next two years. They added that the site is projected to be operational within 12-18 months.

Strengthening Apple's Supply Chain Localisation

eThe prospective plant is expected to bolster Appl's pursuit of localising its supply chain and enhance its collaboration with Tata. The Indian group at present oversees an iPhone manufacturing unit obtained from Wistron Corp. in Karnataka.

The shift in manufacturing base plays into Apple's efforts to diversify operations beyond China by fostering partnerships across India, Thailand, Malaysia, and other regions.

According to a report from the Wall Street Journal on December 7, Apple and its suppliers have set a goal to manufacture over 50 million iPhones annually in India over the next two to three years. They also plan to produce tens of millions of additional units in the following period, it added.

Tata has been proactive in its partnership with the Silicon Valley giant by expanding operations beyond conventional sectors, from salt to software, the report noted. The group has ramped up employment at its existing Hosur facility, focusing on producing iPhone enclosures, while also outlining plans to introduce 100 retail outlets dedicated to Apple products. In tandem, Apple has initiated two stores in India with plans for three more.

Government Incentives and Growth Prospects

Prime Minister Narendra Modi's production-linked incentives (PLIs) have incentivised key suppliers of Apple, such as Foxconn Technology Group and Pegatron Corp., to also escalate their presence in India. This has led to a substantial increase in iPhone assembly in the country, surpassing $7 billion in the previous fiscal year, and capturing approximately 7 percent of the device's global production share.

The planned plant is anticipated to stand as a mid-sized entity among Apple's global iPhone manufacturing facilities. It is expected to exceed the scale of Tata's acquired Wistron plant, which employs over 10,000 individuals, yet remain smaller than Foxconn's significant manufacturing hubs in China, each employing hundreds of thousands.

As the new factory is poised to commence operations at the time when previous state-backed financial incentives are set to lapse, Apple and Tata are likely to seek government subsidies to support its establishment and growth, the report added.