Apple Inc.'s strategy to diversify its manufacturing base and reduce its reliance on China is receiving a significant boost, thanks to Tata Group's initiative to set up a new iPhone assembly unit in India. According to a report by Bloomberg, which cited unnamed sources, the Indian multinational conglomerate plans to establish the factory in Tamil Nadu, a southern state in India.
This new venture is poised to significantly expand Apple's production capacity in India. The proposed facility aims to include around 20 assembly lines and create employment opportunities for 50,000 workers within two years, with an expected operational start in 12 to 18 months.
Tata Group, with its sprawling 155-year-old legacy, operates in diverse sectors, ranging from consumer goods to technology services. Already overseeing an iPhone manufacturing unit in Karnataka, which was acquired from Taiwanese supplier Wistron, Tata is now cementing its role in Apple's supply chain. This expansion marks a key development in Apple's strategy to shift its manufacturing focus to other regions, including India, Thailand, Vietnam, and more.
Renowned Apple analyst Ming-Chi Kuo has highlighted this strategic shift, noting in a Medium post that Apple plans to develop the iPhone 17 in India by 2024. "This will be the first time for Apple to begin the development of a new iPhone model outside of China," Kuo emphasized, indicating the significance of this move in Apple's global supply chain dynamics.
The partnership between Apple and Tata Group is a landmark in the Indian company's history, marking its entry into the assembly of one of the world's most sought-after products. Abhijeet Mukherjee, founder of Guiding Tech, commented on the significance of this collaboration, "The fact that Apple trusted them to make one of the most popular products in the world gives a big boost to confidence in India's manufacturing capabilities, especially when it comes to complex electronic products like the iPhone."
Despite these developments, experts caution that India's journey to becoming a global manufacturing hub is still in its nascent stages. "It is still early days for India's silicon industry," said Varun Krishnan, editor-in-chief of FoneArena, in a conversation with IBT. He pointed out that some components are still sourced from multiple countries, and India's lack of a local semiconductor fabrication unit adds complexity and cost to the manufacturing process.
Abhijeet Mukherjee further added that for India to challenge China's dominance in the long term, its manufacturing sector needs to capture a larger share of its GDP.
The move by Tata Group to establish a new iPhone assembly plant in Tamil Nadu is a strategic step toward realizing India's potential in the global supply chain, reflecting the country's growing capabilities in the manufacturing of complex electronic products. Apple's increasing focus on India for its iPhone production not only diversifies its manufacturing base but also aligns with its long-term strategic goals in the global market.