The Tata group is investing ₹5,000 crore to set up a phone component manufacturing plant in Tamil Nadu, according to a report by The Hindu BusinessLine.
The paper said Tata Sons company, Tata Electronics, has been allotted 500 acres by TIDCO (Tamil Nadu Industrial Development Corporation) and that group firm Titan Co Ltd’s precision engineering division, Titan Engineering and Automation Ltd, will provide the expertise for this project.
With a 27.88% stake in Titan Co Ltd, TIDCO is the single largest shareholder in the watchmaker. The report also said the plant will be used for manufacturing for iPhone maker Apple in India.
Apple didn’t immediately respond to Mint’s queries about the investment. However, an industry executive close to one of the companies said that Apple isn’t involved in the project. "The company has been set up to build an electronics ecosystem. It is not about any particular client," a Tata spokesperson said.
At the moment, the iPhone maker contracts Foxconn, Wistron and Pegatron for manufacturing its phones in India. The Tata plant, on the other hand, seems to be meant for components instead of overall smartphone assembly and manufacturing.
Foxconn already manufactures handsets, including the iPhone 11, for Apple at its facility in Sriperumbudur, outside Chennai. Wistron also manufactures iPhones in its Bengaluru facility, while Pegatron is in the process of setting up its India unit.
In March, the union cabinet had approved a production-linked incentive (PLI) scheme worth ₹40,995 crore to boost electronics manufacturing in the country, with incentives being linked to sales and capital investment. It offers a 4-6% incentive for companies involved in mobile manufacturing. While foreign companies — like Foxconn, Wistron and Pegatron — can reap these benefits on phones with invoice values above Rs. 15000, Indian companies have no such constraint.
The government had approved five international and five Indian companies for the scheme earlier this month. Indian companies in the list include Lava International, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Opteimus Electronics. On the other hand, international players who have been approved include Samsung, Foxconn Hon Hai, Rising Star (owned by Foxconn), Wistron and Pegatron. Components makers like AT&S, Ascent Circuits, Visicon and three others have also been approved.
According to the Ministry of Electronics and Information Technology (MeitY), companies that have been approved for the PLI scheme are expected to drive over Rs. 10.5 lakh crore of production in India in the next five years. Over 50% of these are expected to be exported from the country.
Source: https://www.livemint.com/companies/news/tata-group-to-set-up-rs-5000-crore-phone-component-making-unit-in-tn-report-11603867877879.html
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