Apple's Taiwanese Supplier Pegatron Reportedly Okays Investing $150 Mln in Indian Facility

Apple's Taiwan-based iPhone assembler Pegatron – that registered its India subsidiary in July – is likely to kick-start the work on its facility with an initial investment of $150 million, according to the Taipei Times, citing the company's CEO.

"This is just the initial investment. Due to the COVID-19 situation, it has been harder for Pegatron staff to visit India, resulting in delays", Pegatron CEO Liao Syh-jang said.

During an investor conference earlier this month, the Pegatron CEO revealed that the company will continue pouring more funds into India to build manufacturing facilities over the next two years.

Pegatron aims to start assembling iPhones in India by early next year or by the first phase of 2022. The company has become the third Apple supplier drawn to invest in India after multinational electronics manufacturers Foxconn and Winstron, both of whom operate out of the southern Indian states of Telangana and Tamil Nadu. 

The companies' work in India is in line with the central government's production-linked incentive (PLI) scheme which kicked off in August of this year, under which the iPhone-maker has committed to producing devices worth around $50 billion by 2025 from India, mostly for export.

Pegatron, which is Apple's second largest contract manufacturer, is presently under probation by the iPhone-maker after the Taiwanese company was called out for allegedly recruiting students to work night shifts and overtime at one of its plants in mainland China. Earlier this month, Apple said that Pegatron had violated its Supplier Code of Conduct by allowing students to do work which had no connection to their studies. Pegatron, in turn, said it had taken immediate action after the issue was discovered by Apple's monitoring programme.

In September, Apple finally launched its first-ever store – albeit online - in India, which is the second largest smartphone market in the world, with the number of users inching towards 700 million, most of whom use Google's Android operating system (OS). 

Aiming to export "Made in India" iPhones around the world, in 2019 the tech giant also invested $1 billion in the Chennai-based facility of Taiwanese electronics manufacturer Foxconn.

At the time, an additional $13 million was also invested by Apple to expand its retail presence in the country, which due to the current pandemic has been delayed until 2021.

The trade war between the US and China has gained intensity over the last two years, prompting some industries to look for alternative markets to shift their China-based manufacturing and distribution facilities to.