Tamil Nadu government has signed two major MoUs in the electronics manufacturing segment in January. The state is expected to formalize agreements with Taiwan-based Pegatron and Tata Electronics around the Pongal festival to facilitate establishing units to manufacture Apple products, multiple sources said.
Pegatron, a Taiwan-based manufacturer of Apple products has chosen Mahindra City as the site for its proposed plant in India. The second largest apple products manufacturer is likely to invest around Rs1,200 crore in the first phase to employ about 14,000 people. A subsequent phase will see the company doubling its investment and employment potential, sources with leading international property advisories said.
The government has signed another MoU with Tata Electronics, which will make components for Apple products. It is investing Rs5,000 crore and will employ 18,000 people in the first phase. The company too has lined up higher investments and employment opportunities in subsequent phases. It has already broken ground and started construction work at GMR SEZ near Hosur in Krishnagiri district. The MoU will formalize the investment plans and tune it in line with the state government’s investment incentives.
Foxconn, Pegatron and Wistron are the three leading makers of phones for Apple. While Foxconn is already located near Chennai in Tamil Nadu, Wistron has a manufacturing unit in Karnataka.
The development seems to have convinced Pegatron to settle for a site in Tamil Nadu and it opted for Mahindra World City, a multi-product SEZ about 40 km south off Chennai on the GST Road. Both Pegatron and Tata Electronics are opting for the Government of India’s production-linked incentives to drive exports.
In September, Tamil Nadu government unveiled its ambitious Electronic Hardware Manufacturing Policy seeking to transform the state into a globally competitive Electronics Design and Manufacturing (ESDM) destination. The policy sought to increase Tamil Nadu’s electronics industry output to $100 billion by 2025 and to contribute 25% of total electronic exports to the world from India by that time.
In order to promote electronic manufacturing clusters, Tamil Nadu has categorised the districts into Class A, B and C for administering state-level incentives. To cater to the workforce needs of the industry, the state has plans to train one lakh youngsters on skilled and semi-skilled streams.
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