Citing people familiar with the discussions, a report in The Economic Times says that Tata may acquire the facility, located in Karnataka, for Rs 4,000-5,000 crore. The move is said to be significant as it will help Tata ramp up the manufacturing capabilities of the Tata Electronics Pvt Ltd (TEPL) in precise engineering.
The development comes more than two months after a Bloomberg report claimed that Tata Group was in talks with a Taiwanese manufacturer to establish an electronics manufacturing joint venture in India. Nitty-gritties, such as the structure of the deal and shareholdings, of the deal are not known yet.
It is also reported that Tata might end up buying equity in Wistron’s India operations or the companies could build a new assembly plant. They could also execute both those moves, a person close to the matter was cited as saying.
Boost to challenge China in manufacturing
Currently, China is the main hub of assembly and export of iPhones worldwide. If the deal goes through, it will make Tata the first Indian company to build iPhones, the report said. Additionally, the deal will provide a boost for the country’s effort to challenge China in electronics manufacturing on a global level.
Furthermore, India can also present itself as a contender for high-quality manufacturing hubs and attract other OEMs.
China’s loss is India’s gain
The outbreak of Covid-19 followed by stringent curbs and subsequent protests, along with geopolitical tensions with the US, have jeopardised China’s dominance in electronics manufacturing.
Earlier this year, it was reported that companies, including Apple and Google, were on the lookout for an alternative in order to manufacture iPhones. India and Vietnam were reported to be favourable manufacturing hubs and help the companies diversify production away from China.