The 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), and the bhoomi puja was performed on Tuesday. The investment will be scaled up depending on the level of sourcing from the facility and could even touch ₹8,000 crore.

 

Neither the Tata Group nor the Tamil Nadu government confirm the development, but reliable sources said the unit will be manufacturing components for Apple, which is looking to diversify its sourcing base from China. Foxconn is already manufacturing handsets, including iPhone 11, for Apple at its facility in Sriperumbudur, outside Chennai.

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Titan Co Ltd’s precision engineering division, Titan Engineering and Automation Ltd (TEAL), will 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.

The Tata Group, it appears, is taking advantage of the productivity-linked incentive scheme that the Modi government has announced to deepen India’s electronics manufacturing base including achieving self-sufficiency in manufacturing of mobile handsets.

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TN pips Karnataka

According to sources, there was intense competition between States for bagging this project. In the end Tamil Nadu pipped Karnataka to seal the deal. What worked to Tamil Nadu’s advantage appears to be its favourable policies and the presence of companies like Foxconn, Flex, Samsung, Dell, Nokia, Motorola and BYD to name a few.

There are also reports that other leading manufacturers, including Wistron and Pegatron, are looking to invest in the State, which could potentially be an alternative to China in the long run. The State government recently released 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.

In the Policy, the State government proposes to promote the development of electronics manufacturing clusters (EMC) across the State by 2023, by providing single window clearances to all project proposals. Some of the proposed EMCs include a greenfield unit in Hosur.

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