Tata Sons is seeking up to $1 billion through overseas loans to setup a mobile phone and component manufacturing plant in Tamil Nadu to make Iphone parts, The Economic Times reported citing quoting sources aware of the development.
The partnership with Apple will be part of Prime Minister Narendra Modi’s Make In India push.
The Tata Group will avail the benefits under recently unveiled PLI (productivity-linked incentive) scheme of the Modi government aimed at turning India to a global electronics manufacturing powerhouse.
According to the ET report, Tata Sons plan a capital expenditure of $1.5 billion for building manufacturing capacity in this area. It is looking to secure $750 million to $ 1 billion in external commercial borrowings while mobilising the remaining sum through internal accruals.
While the new production unit is expected to cater to Apple’s sourcing needs to begin with, it may eventually scale to meet the requirements of other original equipment manufacturers from South Korea and Japan.
The Hindu Business Line reported last month that 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). The unit will be manufacturing components for Apple, which is looking to diversify its sourcing base from China.
Titan Co Ltd’s precision engineering division, Titan Engineering and Automation Ltd (TEAL), has been roped in to provide the expertise for this project. The new unit will have a staff strength of 18,000 by October 2021 and 90 per cent of it will be women.
Tamil Nadu government recently unveiled 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 per cent of India’s total electronic exports by that year.
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