TATA Sons to make I-Phones in India

TATA Sons is planning to invest up to $ 1.5Bn to set up a mobile phone and component manufacturing plant in Tamilnadu. This comes after Narendra Modi lead government announced special production linked incentive (PLI) scheme aimed at attracting investments for India, which would otherwise have gone to China.

• What's the story?

The $113 billion Tata Group plans to invest over Rs 11,000 crore or $1.5 billion in setting up a mobile phone and component manufacturing plant in Hosur, Tamil Nadu for which they are currently seeking external funding from foreign investors. The new company, Tata Electronics, the wholly-owned subsidiary of salt-to-software conglomerate Tata Sons, has been allotted 500 acres by Tamil Nadu Industrial Development Corporation (TIDCO) to set up the plant to manufacture mobile phones and components. This move will help India consolidate its position as original equipment manufacturer (OEM) as 300 million phones were assembled in India in 2019 alone, making it the second-largest mobile phone manufacturer in the world after China.

Neither the Tata Group nor the Tamil Nadu government confirm the development, but reliable sources said the unit will be manufacturing components for Apple, which is looking to diversify its sourcing base from China. Foxconn is already manufacturing handsets, including iPhone 11, for Apple at its facility in Sriperumbudur, outside Chennai. Besides catering to Apple's sourcing needs, Tata's will also try to meet other global OEMs' requirements to promote India as an alternative to China in becoming a global manufacturing hub for electronics manufacturing.

Titan Co Ltd’s precision engineering division, Titan Engineering and Automation Ltd (TEAL), will provide the expertise for this project. The new unit will have a staff strength of 18,000 by October 2021 and 90 percent of it will be women.

Tata has started a discussion with the bankers to raise about $1 billion or Rs 7400 crore for the project through external commercial borrowings (ECB) and fund the rest through internal accruals.

 

• What's next ?

As per recent reports, mobile phone sales saw a huge uptrend during the festive days even when social media was very much vocal against the Chinese-made smartphone makers. This move from TATAs will definitely push India's growth as mobile manufacturer. We will keep you updated on this as how Titan is connected to this development.