Indian Tata Group is in talks with Taiwanese supplier Apple Inc. about creating a joint venture

Tata Group has begun negotiations with Taiwanese supplier Apple Inc. on the formation of an electronics manufacturing joint venture in India to assemble the iPhone in the country.

The purpose of these negotiations with Wistron Corp. is to solidify Tata as one of the important players in technology manufacturing, and the Indian salt-to-software conglomerate plans to leverage the Taiwanese company’s experience in product development, supply chain, and assembly. If the talks go well, Tata could become the first Indian company to manufacture iPhones, which are now mostly assembled by Taiwanese manufacturing giants such as Wistron and Foxconn Technology Group in China and India.

The Indian company, which plans to make the iPhone, will be an alternative to manufacturing from China, whose dominance in electronics manufacturing is under threat due to the introduction of quarantine and political tensions with the United States. In addition, India could bring in other global electronics brands to ease its dependence on China and its geopolitical complexities.

The internal details of the deal, including the shareholding, have yet to be finalized and negotiations are ongoing. The plan is speculated to include Tata buying a stake in Wistron’s operations in India, or the companies could build a new assembly plant.

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Apple has recently been looking to diversify production outside of China and deepen its supply chain in India. The company works with local firms where it builds manufacturing bases, but assembling an iPhone is more of a challenge, requiring tight deadlines and quality control.

The new venture plans to eventually increase the number of iPhones assembled by five times what Wistron currently manufactures in India. The collaboration will also bring a share in Wistron’s manufacturing business to Tata.

For Wistron’s Indian business struggling with losses, an agreement with Tata would provide a powerful local partner with a backlog of finance as Tata covers automobiles, including electric vehicles, an area in which many of the world’s tech giants are looking to expand.

Wistron began making iPhones in India in 2017, and the Taipei-based company now assembles iPhones at its factory in southern India’s Karnataka state.