Tata To Set Up Plant For Apple Phone Component

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What happened?

The Tata Group is investing ₹5,000 crore to set up a phone component manufacturing plant at the industrial complex in Hosur, Tamil Nadu.
The new company, Tata Electronics, has been allotted 500 acres by TIDCO
(Tamil Nadu Industrial Development Corporation), and the bhoomi puja was performed on Tuesday.
The investment will be scaled up depending on the level of sourcing from the facility and could even touch ₹8,000 crore.

The unit will be manufacturing components for Apple.
Apple 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.
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.

The Tata Group, it appears, is taking advantage of the productivity-linked incentive scheme that the
Modi government has announced, To deepen India’s electronics manufacturing base including achieving self-sufficiency in manufacturing of mobile handsets.

It would give incentives of 4-6% to electronics companies which manufacture mobile phones and other electronic components such as-
Transistors, diodes, thyristors, resistors, capacitors and nano-electronic components such as micro electromechanical systems.
According to the scheme, companies that make mobile phones which sell for Rs 15,000 or more will get an incentive of up to 6% on incremental sales of all such mobile phones made in India.
In the same category, companies which are owned by Indian nationals and make such mobile phones, the incentive has been kept at Rs 200 crore for the next four years.

Titan Co Ltd’s precision engineering division, Titan Engineering and Automation Ltd (TEAL), will provide the expertise for this project.
With a 88% stake in Titan Co Ltd, TIDCO is the single largest shareholder in the watchmaker.

There was intense competition between States for bagging this project.
In the end Tamil Nadu pipped Karnataka to seal the deal.
What worked to Tamil Nadu’s advantage appears to be its favourable policies and the presence of companies like Foxconn, Flex, Samsung, Dell, Nokia, Motorola and BYD to name a few.
The State government recently released the Tamil Nadu Electronics Hardware Manufacturing Policy 2020 and has set an ambitious target to increase electronics industry output to $100 billion by 2025.
It envisages the State contributing 25% of India’s total electronic exports by that year.