Tata Group, India's largest conglomerate, is close to an agreement to acquire an Apple supplier's factory as soon as August, marking the first time a local company would move into the assembly of iPhones, according to people familiar with the matter.

A takeover of the Wistron factory in southern Karnataka state, potentially valued at more than $600 million, would cap about a year of negotiations, said the people, asking not to be named as the matter is private. The facility employs more than 10,000 workers, who assemble the latest iPhone 14 model.

Wistron has committed to shipping iPhones worth at least $1.8 billion  from the factory in the fiscal year through March 2024 to win state-backed financial incentives, the people said. It also planned to triple the plant's workforce by next year. Tata is set to honour those commitments as Wistron exits the iPhone business in India.

Spokespersons for Tata, Wistron and Apple declined to comment.

The addition of an Indian iPhone is likely to add momentum to Apple's efforts to diversify its product base beyond China and build up technology manufacturing in the South Asian nation. Wistron exported nearly $500 million in iPhones from India in the three months ended June 30, and Apple's other key Taiwanese suppliers, Foxconn Technology Group and Pegatron, have also ramped up locally.

India has made progress in domestic manufacturing since Prime Minister Narendra Modi set up government programs with lucrative financial incentives to expand production and employment. Apple has stepped up efforts to diversify away from China in the aftermath of the country's Covid lockdowns and rising tensions between Washington and Beijing.

An Indian company making iPhones could prove a significant boost for Modi's efforts to challenge China's status as the factory of the world. It may help persuade other global electronics brands to consider production in India to reduce their reliance on China.

The 155-year-old Tata Group sells everything from salt to tech services. Over the past few years, the group has sought to make inroads into electronics production and e-commerce, both relatively new territories for the Tata family.

It already makes the iPhone chassis, or the metal backbone of the device, at its factory, spread over hundreds of acres of land in Tamil Nadu state. The Tatas also foster chipmaking ambitions, Chairman N Chandrasekaran has previously said.