Tamil Nadu to pip Karnataka in sealing iPhone-manufacturer Pegatron plant deal?

Taiwanese electronics major Pegatron Corporation, one of the largest contract manufacturers of Apple Inc, is likely to choose Tamil Nadu for setting up its first production unit in India. After months of scouting and negotiations with various state governments, including Karnataka, Pegatron Corporation may have finally decided to settle near Chennai, informed sources told DH.

A high-level delegation from Pegatron had met Karnataka government officials in November, who had made a detailed presentation on the facilities and incentives that would be accorded to the company if it chose the state. However, Chennai's proximity to three seaports seem to have worked in favour of the city.

The development also comes close on the heels of violence at Wistron factory outside Bengaluru that made headlines across the globe. After the incident, California-based Apple Inc had put Wistron on probation, saying the Taiwanese company will not receive any new contract.

The sources said the talks between Tamil Nadu and Pegatron Corporation, the third major contract manufacturers for Apple iPhones to enter India after Foxconn and Wistron, is at an “advanced stage” and another meeting between the two sides is likely to take place in the coming weeks.

“We have held several rounds of talks with the senior management of Pegatron. The company's India head met Chief Minister Edappadi K Palaniswami in November. The talks are progressing well and we will have another round of talks to discuss and finalise the incentives that will be accorded to the Taiwanese company,” a source in the know of the development told DH.

The source added that the meeting in January between the two sides, which may see Palaniswami himself leading the discussions, might see the fruition of the deal. “The meeting will see the participation of representatives from various ministries. We hope the discussions will be concluded soon and the MoU is signed in January,” the source said.

A questionnaire sent to Pegatron via e-mail remained unanswered till the time of writing.

If all goes well, Pegatron will be the second contract manufacturer to assemble iPhones in Tamil Nadu after Foxconn, which has pledged to invest Rs 7,000 crore in expanding its capacity at its massive facility in Sriperumbudur near here.

Pegatron Corporation had in November approved a proposal to invest Rs 1,100 crore through its subsidiary, Pegatron Technology India Private Limited, for its India plans. However, there is no clarity on how much would be spent on the plan initially. Pegatron, which has already opened its registered office in Chennai, plans to launch production from its new plant in the second half of 2021 or early 2022.

A government source said the state administration has identified a large tract of land near Vallakottai in Kanchipuram district just outside Chennai for Pegatron to set up its unit. The land is already under the possession of the government as part of its land bank, the source said.