In a significant development that highlights the growing partnership between Apple and Tata, Tata Electronics has acquired a majority stake in Pegatron’s only iPhone production facility in India. This move not only underscores Tata’s ambitions in the tech manufacturing space but also aligns with Apple’s strategy to diversify its supply chain amid ongoing geopolitical tensions.
The Strategic Acquisition
According to a Reuters report, Tata Electronics will take control of 60% of the joint venture, assuming daily operational responsibilities. Pegatron, however, will retain 40% ownership and provide ongoing technical support. While the financial details of the agreement remain undisclosed, this deal marks a pivotal moment in Tata’s journey as a key player in Apple’s manufacturing ecosystem.
This acquisition follows months of speculation. Earlier in April, reports emerged that Pegatron was in advanced negotiations with Tata Electronics to sell its sole Indian iPhone manufacturing plant, with Apple’s support. The Chennai-based facility employs around 10,000 workers and produces approximately 5 million iPhones annually, making it a crucial part of Apple’s global supply chain.
Apple’s Shift Towards India
The deal aligns with Apple’s broader strategy to reduce its dependency on China as a manufacturing hub. In light of escalating geopolitical tensions between Beijing and Washington, Apple has been actively diversifying its supply chain to ensure business continuity and mitigate risks.
India has emerged as a vital market and manufacturing hub for Apple, with the country expected to account for 20–25% of global iPhone shipments in 2023, a substantial increase from 12–14% in 2022. Piyush Goyal, India’s Minister of Commerce, stated last year that Apple aims to produce 25% of its iPhones in India by 2023, highlighting the company’s commitment to expanding its footprint in the region.
Tata’s Growing Role in iPhone Production
This acquisition adds to Tata’s increasing involvement in Apple’s manufacturing ecosystem. The conglomerate had previously acquired Wistron’s facility in Karnataka, which was one of Apple’s early manufacturing units in India. Additionally, Tata Electronics is building another plant in Hosur, Tamil Nadu, further solidifying its role as a critical player in Apple’s supply chain.
With the addition of Pegatron’s Chennai facility, Tata is poised to significantly boost its iPhone production capacity. This expansion positions Tata Electronics as a strong competitor to Foxconn, the other major contract manufacturer for Apple in India.
India’s Growing Export Powerhouse
Apple’s “Make in India” initiative has been a resounding success, with iPhone exports from India breaking records. During FY23–24, Apple exported over $10 billion worth of iPhones, nearly doubling from $6.27 billion in FY22–23. The company also produced $14 billion worth of iPhones in India in the last fiscal year.
India’s favorable manufacturing policies and ease of doing business have played a key role in Apple’s expansion. With exports in the first half of FY25 projected to exceed Rs 50,000 crore (over $6 billion), Apple’s contribution to India’s tech exports continues to grow significantly.
Expanding Apple’s Retail Presence in India
Apart from manufacturing, Apple is strengthening its retail presence in India. The company recently teamed up with Tata to open 100 retail stores nationwide for Tata’s products. Additionally, CEO Tim Cook announced plans to open four new branded Apple stores in India, citing record-breaking revenue growth in the country.
Tim Cook expressed optimism during Apple’s Q4 fiscal 2024 earnings call, stating,“The excitement we’re witnessing in India, where we achieved an all-time revenue record, continues to thrill us. We’re eager to open four new stores for Indian customers.”
A Strategic Partnership for the Future
The Tata-Pegatron deal symbolizes a win-win for both Apple and Tata. For Apple, this partnership strengthens its supply chain resilience and expands its manufacturing base in a high-growth market. For Tata Electronics, the acquisition solidifies its position as a key player in the global tech manufacturing space, with the potential to rival established names like Foxconn.
As Tata continues to grow its production capacity, Apple’s reliance on India for iPhone manufacturing is set to deepen. With increasing exports, robust local production, and an expanding retail footprint, Apple’s India story is just beginning to unfold.
This joint venture marks a new chapter in the India-Apple partnership, reflecting the growing importance of India as a global manufacturing hub. As Tata Electronics assumes a more prominent role in Apple’s supply chain, the future of iPhone production in India looks brighter than ever.
Stay tuned for more updates on this dynamic collaboration that’s reshaping the tech manufacturing landscape!
