India's Tata Group is set to acquire a factory in the state of Karnataka, owned by Apple supplier Wistron Corporation, according to media reports. If the deal goes through, Tata will become the first Indian company to start manufacturing iPhones.

Wistron's 2.2 million square feet factory has a workforce of 10,000 and currently assembles iPhone 14 models. The media report says that once Tata Group takes over the facility, it will honor Wistron's commitment to ship iPhones worth $1.8 billion by the end of this financial year.

Media reports say the Tata Group is likely to invest around 50 billion Indian rupees ($607.4 million) to acquire the factory and the deal is likely to close as soon as next month. The manufacturing unit was in the news in 2020 when violence broke out over workers' wages.

Three Taiwanese firms – Foxconn, Pegatron and Wistron – currently have iPhone assembly plants in the country. The reasons for Wistron's exit from Apple manufacturing in India are not clear. It is possible that it will continue as Apple's service partner in India.

Making India an alternative to China

The government hopes that if an Indian firm produces iPhones for global leader Apple, this will enhance the country's profile as a manufacturing destination. It may inspire other device and electronics manufacturers to consider setting up their manufacturing units there. It will also help develop the components supply chain in India.

The Indian government has been trying to position the country as an alternative to China for manufacturing. It has introduced several schemes, such as "Make in India," to that end.

Also at play here is the issue of Apple itself, which has been trying to move production out of China because of the country's geopolitical tensions with the US. The company's production in China was also affected by long and stringent lockdowns imposed to prevent the spread of COVID-19. But it's not just about China: The pandemic also shone a light on Apple's general over-dependence on a small number of suppliers.

Apple started manufacturing in India in 2020 and opened its first company-owned retail stores in Mumbai and New Delhi earlier this year.

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— Gagandeep Kaur, Contributing Editor, special to Light Reading