Tata group to set up Rs. 5000 crore phone component making unit in TN: Report

According to a report by The Hindu BusinessLine, the Tata group is investing Rs. 5,000 crore (US$ 676.59 million) to set up a phone component manufacturing plant in Tamil Nadu.

The paper claimed that Tata Sons, Tata Electronics, was allocated 500 acres by TIDCO (Tamil Nadu Industrial Development Corporation) and that the precision engineering division of the Titan Co Ltd group company, Titan Engineering and Automation Ltd, would provide the expertise for this project.

TIDCO is the single largest shareholder in the watchmaker, with a 27.88% stake in Titan Co Ltd. The report also claimed that the plant would be used in India for manufacturing for iPhone maker Apple.

Apple didn't respond immediately to Mint 's investment queries. An industry executive close to one of the businesses, however, said Apple is not involved in the project. A Tata spokesperson said, "The company has been set up to build an electronics ecosystem. It is not about any particular client."

The iPhone manufacturer is currently contracting with Foxconn, Wistron and Pegatron to produce its phones in India. On the other hand, instead of general smartphone assembly and production, the Tata plant seems to be intended for parts.

At its facility in Sriperumbudur, outside Chennai, Foxconn already manufactures handsets, including the iPhone 11, for Apple. In its Bengaluru factory, Wistron also makes iPhones, though Pegatron is in the process of setting up its India plant.

In March, a production-linked incentive (PLI) scheme worth Rs. 40,995 crore (US$ 5.55 billion) was approved by the union cabinet to improve electronics manufacturing in the country, with incentives linked to sales and capital investment. For companies engaged in mobile production, it gives a 4-6% opportunity. Though foreign companies, such as Foxconn, Wistron and Pegatron, can reap these advantages on phones with invoice values above Rs. 15000 (US$ 202.98), there is no such restriction for Indian companies.

Five international and five Indian firms were approved by the government for the scheme earlier this month. Lava International, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Opteimus Electronics are Indian companies included in the list. Samsung, Foxconn Hon Hai, Rising Star (owned by Foxconn), Wistron and Pegatron are, on the other hand, foreign players who have been authorised. Also accepted were component manufacturers such as AT&S, Ascent Circuits, Visicon and three others.

Companies approved for the PLI scheme are projected to drive over Rs. 10.5 lakh crore (US$ 140 billion) of production in India in the next five years, according to the Ministry of Electronics and Information Technology (MeitY). It is estimated that over 50% of these will be exported from the region.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.