Tata Electronics has acquired the Indian unit of the Chinese industrial company Justech Precision for nearly $100 million, in an effort to increase its manufacturing capacity in case Apple shifts its iPhone production to India, according to two individuals familiar with the matter.
According to some reliable sources, the deal was finalized in August, with HSBC Bank and HDFC Bank providing advisory services. Justech Precision is a Kunshan-based company in Jiangsu, China, which has been supplying Apple since 2008.
It supplies the industrial equipment, including the computer numerical control machines, with the help of which the cutting is performed at high precision, and the fabrication is executed for Foxconn, the largest assembler of Apple products across the globe.
Justech Precision Industry India, which was incorporated in late 2019 and is headquartered in the southern Indian state of Tamil Nadu, did not reply to the requests of CNBC to comment and nor did Tata Group.
Meanwhile, Tata Electronics refused to respond to the matter. Reuters reported that Tata Electronics was reported to have purchased a 60 percent stake in an Indian business of Taiwanese contract manufacturer Pegatron that has an iPhone plant; therefore, the value of the deal remained undisclosed.
The acquisitions occur in the backdrop of Tata Electronics, which started assembling iPhones in India in 2023, aiming to increase its production capacity with Apple allegedly intending to have all the iPhones assembled in India to cover the U.S. market by the end of 2026.
Apple still makes most of its smartphones in China. But it is moving quickly to build capacity in India by working with contract manufacturers like Tata Electronics and Foxconn. Apple is shifting from China due to higher tariffs and rising geopolitical tensions.
According to Neil Shah, Co-founder and Vice President of Counterpoint Research, Foxconn ships two-thirds of the iPhones to India. Tata ships the remaining one-third. Shah predicts Tata’s market share will grow as production rises.
Tata now has two plants in Tamil Nadu, in southern India. It also has one plant in neighboring Karnataka, which was formerly owned by Wistron.
The outbreak of the pandemic and the subsequent lockdown in China shook the production of the largest assembly plant of Apple forcing it to find other options of manufacturing options.
The escalated tensions between Beijing and Washington and the increased tariffs on the imports of Chinese products into the U.S. this year have made Apple fast-track the production change.
U.S. President Donald Trump first imposed prohibitive triple-digit tariffs on Chinese imports, and later provided a temporary tariff moratorium on shipments of smartphones.
Although the U.S. also imposes high tariffs on India, iPhones produced in India have no duties at this point.
Trump has been furious about Apple shifting to India and not to the U.S. in production, a move that, in May, he threatened to impose a 25 percent tariff on iPhones.
