Tata is in negotiations to purchase Pegatron's iPhone division as soon as May

Tata is in negotiations to purchase Pegatron's iPhone division as soon as May

Unnamed sources claim that Pegatron would provide Tata with manufacturing knowledge after the transaction.

The possible collaboration comes as Apple is diversifying its supply chain away from China in order to reduce geopolitical risks, and is stepping up its attempts to increase production in India with the help of financial incentives provided by Prime Minister Narendra Modi's administration.

As early as May, Tata Group may reach an agreement to acquire Pegatron Corp.'s iPhone production facilities in India, solidifying Apple Inc.'s partnership with one of the nation's most significant conglomerates.

People with knowledge of the situation say that Tata Group is nearing the end of talks with Pegatron to acquire a majority share in the Taiwanese company's Apple device manufacturing operations in India. Among these are two iPhone manufacturing facilities, one now under development and one in Tamil Nadu, a state in southern India, close to Chennai.

Pegatron is anticipated to provide Tata with manufacturing know-how after the deal, according to the sources, who wished to remain anonymous due to the confidential nature of the material.

Following the completion of the purchase, Pegatron's activities would be managed by Tata Electronics Ltd., they said. Reuters first reported on the discussions this month.

Pegatron did not react to a request for comment, and a Tata official refused to comment.

The possible collaboration comes as Apple is diversifying its supply chain away from China in order to reduce geopolitical risks, and is stepping up its attempts to increase production in India with the help of financial incentives provided by Prime Minister Narendra Modi's administration.

In an effort to encourage major Apple suppliers like Taiwan's Foxconn Technology Group and Pegatron to increase manufacture in India, Modi, who is running for a third five-year term, has provided output-linked incentives.

After purchasing an iPhone facility in the nearby state of Karnataka from Taiwan's Wistron Corp., Tata Group first started assembling iPhones. In an effort to strengthen its alliance with Apple, it also intends to construct a new iPhone manufacturing facility.