Tata gives trouble to China, makes big deal with Taiwanese company on iPhone

Tata Group has once again put China in trouble. The main reason for which is to lock a big deal with the Taiwanese company on iPhone. India’s Tata Electronics has agreed to buy a majority stake in Taiwanese contract maker Pegatron’s sole iPhone plant in India, two sources told Reuters. Due to which a new joint venture will be formed which will strengthen Tata’s position as an Apple supplier.

Under the mutual deal signed last week, Tata will hold 60 percent stake and run the day-to-day operations under the joint venture, while Pegatron will hold the remaining stake and provide technical support. According to media reports, sources have not given any information about the financial status of the deal. On the other hand, Tata also refused to comment. At the same time, no official statement has come from Apple and Pegatron.

Consideration of supply chain separate from China

Reuters first reported in April that Pegatron, backed by Apple, was in advanced talks to sell its sole iPhone plant in India to Tata, marking the Taiwanese firm’s latest move to become an Apple partner. Amidst the geopolitical tension between Beijing and Washington, Apple is considering diversifying its supply chain away from China. For Tata in India, the Chennai Pegatron plant will give a boost to its iPhone manufacturing plans. Tata is one of the largest conglomerates in India and is rapidly expanding into iPhone manufacturing, rivaling Foxconn, the only other iPhone contract manufacturer operating in India.

CCI approval will have to be taken

The deal was finalized internally at the iPhone plant on Friday, the first source said. The second source said both companies are planning to apply for approval from the Competition Commission of India (CCI) in the coming days. Tata already operates an iPhone assembly plant in the southern state of Karnataka, which it took over from Taiwan’s Wistron last year. It is also building another in Hosur, Tamil Nadu, where it also has an iPhone component plant which was involved in a fire in September.

Analysts estimate that India will contribute 20-25 percent to the total iPhone shipments this year, which was 12-14 percent last year. The Tata-Pegatron plant, which has about 10,000 employees and produces 5 million iPhones annually, will be Tata’s third iPhone factory in India.

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