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Tatas eye iPhone maker club, exploring JV with Wistron

To first need govt as well as Apple’s nod

Tatas eye iPhone maker club, exploring JV with Wistron
Apple has already established a strong footing in India in terms of domestic manufacturing under the PLI scheme and closed FY22 with exports worth Rs 10,000 crore.

Tata Group and Taiwan’s Wistron, which is Apple‘s contract manufacturer, are in talks to establish an electronics manufacturing joint venture in India to assemble iPhones.

However, any such talks would first need the approval of Apple as well the ministry of electronics and information technology (MeitY). Industry as well as government sources told FE that both the firms have not yet approached either Apple or MeitY.

A Bloomberg report also said that the structure of the deal and details such as shareholdings are yet to be finalised.

Sources told FE that since manufacturing of iPhones in India by its contract manufacturers – Wistron is one such company – is being done under the production-linked incentive (PLI) scheme, a final nod by MeitY would be required if there’s any change in the shareholding pattern. Prior to this, Apple would need to approve any such joint venture.

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Sources said that since the JV under discussion is with regard to deepening production in the country, in the event it gets formalised, Apple as well as the government are likely to approve.

Apple has already established a strong footing in India in terms of domestic manufacturing under the PLI scheme and closed FY22 with exports worth Rs 10,000 crore.

This export target has been achieved by two of its contract manufacturers – Wistron and Foxconn Hon Hai.

There’s a third contract manufacturer of Apple – Pegatron – which has also been selected under the PLI and has begun production from April this year.

Apple is now able to meet around 75-80% of its total demand in India through domestic production, against only 10-15% a year ago.

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Sources said that during the current fiscal, the company will be able to meet the entire domestic demand through its own output.

The domestic production story of Apple is barely a two-year-old phenomenon. The government unveiled its PLI scheme for smartphones in April 2020 and the selected companies started operations from August the same year. However, the first year was a washout because of Covid, which disrupted the entire supply chain. The government later extended the duration of the scheme from a five-year period to six, giving the companies the option to select five years within this span. This way, Apple’s cycle under PLI started from August 2021. Analysts said that Apple through its first-year performance has achieved the objective set out by the government under the PLI scheme like shifting of global production base to India, making India the export hub for phones and also catering to the domestic demand.

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