Tata Electronics has acquired Chinese industrial firm Justech Precision's India unit for close to $100 million, according to two people familiar with the matter, as the Tata Group subsidiary bolsters its manufacturing capacity to benefit from Apple's focus on iPhone manufacturing in India. The transaction was concluded in August, with HSBC Bank and HDFC Bank advising on the transaction, according to the people close to the deal. Headquartered in the city of Kunshan in Jiangsu province, China, Justech Precision has been a supplier to Apple since 2008. It provides industrial equipment, such as computer numerical control machines used for precise cutting and fabrication tasks, to Foxconn, the world's largest assembler of Apple products. Justech Precision Industry India, incorporated in late 2019 and based in the southern Indian state of Tamil Nadu did not respond to CNBC's requests for comments, neither did Tata Group. Tata Electronics declined to comment. In January, Tata Electronics reportedly bought a 60% stake in Taiwanese contract manufacturer Pegatron's India operation that operates an iPhone plant, Reuters reported . The deal's value was not disclosed. The acquisitions come as Tata Electronics, which began assembling iPhones in India in 2023 , seeks to expand its manufacturing capacity as Apple reportedly plans to source all of the iPhones for the U.S. market from India by the end of 2026. Apple, which still manufacturers most of its smartphones in China, has been taking urgent steps to build capacity in India with contract manufacturers Tata Electronics and Foxconn, pivoting away from China amid higher tariffs and geopolitical tensions . Foxconn still accounts for two-thirds of India's total iPhones shipments, with Tata making the remaining one-third, according to Neil Shah, co-founder and vice president at market research firm Counterpoint Research, who expects that market share could change soon as Tata scales up its manufacturing. Tata currently operates two plants in the southern Indian state of Tamil Nadu and one in neighboring Karnataka, which was formerly owned by Wistron . Made in India by 2026 Apple started looking for manufacturing alternatives after the pandemic outbreak and subsequent lockdown in China disrupted output at its largest assembly plant. The heightened Beijing-Washington tensions and tariff hikes on Chinese imports into the U.S. this year have prompted Apple to accelerate the shift in production. U.S. President Donald Trump initially slapped prohibitive triple-digit tariffs on imports from China before granting a temporary reprieve for smartphones shipments. Despite India also facing high tariffs from the U.S., iPhones made in India don't attract any duties as of now . Apple's shift in production to India instead of the U.S. has angered Trump, who in May threatened to impose a 25% tariff on iPhones. Prime Minister Narendra Modi has in recent years worked to promote India as a smartphone manufacturing hub , eager to embrace Apple and use it as a symbol to attract other high-tech firms to the country for manufacturing and development. But Apple has also faced challenges in its early experiments manufacturing in the country, most notably at a Wistron factory in Bengaluru assembling older model iPhones, which saw a labor riot in late 2020. Apple is looking to build "highly localized" partners to become "truly diversified," instead of bringing Chinese or Taiwanese partners in India and be dependent on them, Shah said, but finding alternatives for components sourced primarily from Chinese suppliers could take years. "It will not be a sprint to build like-for-like supplier ecosystem as it enjoyed in China, but a marathon and a step by step process," Shah added. India will account for around 26% of global iPhone shipments by the end of 2025, up from 20% at the start of the year, according to the latest estimate by Counterpoint. Apple's Chief Operating Officer Jeff Williams visited Justech's innovation exhibition center in Jiangsu during his trip to China in March where he pledged to continue to make large-scale investment in the country.
