Tata Group plans Rs11,000-cr mobile phone manufacturing plant in Tamil Nadu
09 Dec 2020
Tata Group is planning to set up a mobile phone and components manufacturing facility in Tamil Nadu, with investment of around Rs11,000 crore, in a move that will help India consolidate its position as original equipment manufacturer (OEM) and bolster Prime Minister Narendra Modi’s `Atmanirbhar Bharat’ initiatives.
Tamil Nadu Industrial Development Corporation (TIDCO) has allocated 500 acres of land to Tata Group company Tata Electronics for setting up the plant which will manufacture mobile phones and components.
The Rs11,000 crore investment will take advantage of the government's production linked incentive (PLI) scheme aimed at attracting investments in sectors that are India’s forte.
With 300 million phones assembled in the country in 2019, India is already the second-largest mobile phone manufacturer after China and the new investments under the PLI scheme could make the country the world’s top mobile phone manufacturer.
The number of mobile phone manufacturing/assembling plants in India has increased from just two in 2014 to around 100 in 2019 and the PLI scheme, which has attracted companies like Apple as also Taiwanese contract manufacturer Foxconn, could give a further leg-up to mobile phone production in the country.
The PLI scheme has attracted investors from across the world, including mobile phone and component manufacturers such as Samsung, Wistron, Pegatron, Foxconn and Hon Hai from Taiwan, Samsung from South Korea, and companies from Germany and Austria.
Indian firms such as Lava, Dixon, Micromax, Padget Electronics, Sojo, UTL, and Optiemus have also applied for inclusion in the PLI scheme.
The Tata plant will cater to original equipment needs of manufacturers, including Apple, besides meeting other global OEM requirements, and provide an alternative to countries like China and Taiwan for sourcing electronic components.
Reports said Titan Engineering and Automation Ltd (TEAL), Titan Co Ltd's precision engineering division, has been tasked with providing expertise for the project, which will employ around 18,000 people, mostly women, by October 2021.
Tata is reported to be pushing ahead with plans to raise around $1 billion (about Rs7,400 crore) through external commercial borrowings with the remaining to be raised internally.
With new production capacities coming up, mobile phone production in the country is expected to increase to around Rs 27.5 lakh crore, far exceeding government's estimates of over Rs11 lakh crore, according to industry body India Cellular and Electronics Association (ICEA).