Tata wants to construct the factory in Hosur in the southern
Tamil Nadu state, according to people with knowledge of the matter. The
facility will likely have about 20 assembly lines and employ 50,000 workers
within two years, according to the people, who declined to be named discussing
unannounced plans. The goal is for the site to be operational in 12 to 18
months.
The plant would bolster Apple's efforts to localise its
supply chain and strengthen its partnership with Tata, which already has an
iPhone factory it acquired from Wistron. in the neighbouring Karnataka state.
Apple is diversifying its operations away from China by working with assembly
and component manufacturing partners in India, Thailand, Malaysia and
elsewhere.
An Apple spokesman declined to comment, while a Tata
representative didn't respond to a request for comment.
The Indian conglomerate has taken other steps to increase
its business with Apple and expand beyond its traditional businesses that range
from salt to software. It has accelerated hiring at its existing facility in
Hosur, where it produces iPhone enclosures, or metal casings. Tata has also
said it'll launch 100 retail stores focused on Apple products. For its part,
Apple has opened two stores in the nation and is planning three more.
Prime Minister Narendra Modi's production-linked subsidies
have spurred Apple's key suppliers such as Taiwan's Foxconn and Pegatron to
ramp up in India. That helped Apple assemble more than $7 billion of iPhones in
India in the previous fiscal year, increasing the country's share of the
device's production to about 7 percent. The rest are assembled in China, which
until a few years ago made all of them.
The new plant is set to be mid-sized among iPhone factories
globally. It would likely be bigger than the one Tata acquired from Wistron,
which employs more than 10,000 people, and smaller than Foxconn's biggest China
facilities that employ hundreds of thousands.
Apple and Tata could likely urge the government to award
subsidies for the new factory as it's expected to begin production just as
previous state-backed financial incentives are set to expire. © Bloomberg L.P.
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