India has emerged as an alternative for Apple’s iPhone production, as the Tata Group is set to manufacture devices in the country for both domestic and international markets.
Electronics and Technology Minister Rajiv Chandrashekhar today said the project will be completed within two and a half years and the government will support the Tata Group and other Indian electronics companies in their efforts to collaborations with international brands.
The deal was finalized after Taiwan-based Wistron Corp, a contract manufacturer for Apple, was given approval to sell its Indian unit to Tata Group for $125 million. Following the board approval, Tata Group will own 100% stake in Wistron Infocom Manufacturing (India) Private Limited (WMMI). Once confirmed by the relevant parties the deal will proceed to obtain necessary approvals.
Companies like Tata, which can specialize in both high-volume, low-margin and low-volume, high-margin products with the acquisition of Wistron’s facilities, will help catalyze the electronics ecosystem, Chandrashekhar said.
The move marks a significant shift in Apple’s strategy, as it has traditionally relied on Chinese factories to produce most of its new iPhones and deliver them to customers around the world.
However, the ongoing trade war between the US and China, as well as rising Chinese labor costs, has led Apple to seek alternative sources of production. India has emerged as an attractive option with its large consumer market, skilled workforce and favorable government policies.
Since 2017, Apple has been manufacturing iPhones in India, commencing with the iPhone SE. Since then, the company has continued to expand its operations to locally assembling the iPhone 15 and iPhone 15 Plus.
Not just Apple, but tech giants like Google are also committed to diversifying their phone manufacturing base in India. Earlier this month, Alphabet CEO Sundar Pichai had said that Google will start manufacturing its latest Pixel 8 devices in India, which will be launched early next year. Gradually, Google aims to make its entire smartphone portfolio in the country available for local sales and exports, the company said.