Tata Group reportedly buying Pegatron's only iPhone plant in India

Pegatron is reportedly in talks to hand over its only iPhone manufacturing facility in India to the Tata Group. If the deal goes through, Tata will be seen holding at least a 65% stake in a joint venture that will operate the Pegatron plant near Chennai, while the Taiwanese firm will continue to provide technical support and hold the rest. It is reported that the deal is backed by Apple.

Tata will reportedly operate the joint venture through its Tata Electronics unit.

Almost 10,000 employees work in the Pegatron plant and it produces five million iPhones annually. It is the last such facility operated by the firm after it forfeited control of an iPhone plant in China last year to rival Luxshare in a $290 million deal.

With this Apple is continuously trying to diversify its supply chain outside China amid geopolitical tensions between Beijing and Washington. The iPhone manufacturing plans of Tata will get bolstered with the Chennai Pegatron plant.

Tata already operates an iPhone assembly plant in the neighbouring southern state of Karnataka, which it took over from Taiwan's Wistron last year, and is also building another in Hosur in Tamil Nadu, where Pegatron is likely to emerge as its joint venture partner.

According to a source, for last few months Pegatron is building another iPhone factory at its Chennai campus and the anticipated deal also includes taking over that facility.

The talks between Tata and Pegatron for the factory are expected to close in six months and will see all of the Pegatron India employees move to the joint venture entity. Apple's iPhone contract manufacturers in India currently include Tata, Pegatron and Foxconn. Tata is key to Apple's growing ambitions in India, which analysts estimate will contribute 20-25% of total iPhone shipments this year, from 12-14% last year.