Tata Sons will manufacture iPhones in India

The Indian firm will spend Rs. 11,000 Crore to start the process.

Tata Sons are setting up a manufacturing plant in Tamil Nadu; the firm is acquiring $1 Billion loans from foreign investors to facilitate this venture. This partnership is a method of boosting Narendra Modi's "Make in India" ideology. Tata Group will also gain incentives from the recently created PLI (productivity-linked incentive) scheme.

The PLI is a new scheme which is specifically created to reduce India's dependence on China. The scheme gives incentives for the incremental sales of domestically produced units. This scheme applies to mobile appliances, pharmaceutical ingredients and other medical devices. These are three labour-intensive sectors targeted by the scheme to provide for the massive demand for employment in the country.

The idea is to set up capitally prosperous industries in India to grow and develop the nation economically. This will set up advanced firms in India and make the country a location for technological industrialisation. Increasing the amount of capital and the quality of money is integral for developing an economy in its future. Therefore, this scheme will help in both, increasing the quantity of the capital and the quality; is beneficial for the country in the long run.

It is plausible that following Apple, many new firms enter the mass Indian economy in the hopes of using the lower costs of production, which can be again, the beneficiary for India. Apple is looking to move out of China to gain better PR, so it will move to the next best alternative, which is India.

Tata Group is looking at setting up a phone component manufacturing unit worth Rs. 5,000 Crore, and their new company, Tata Electronics has been allotted 500 acres of land by Tamil Nadu Industrial Development Corporation. This venture is also giving jobs to large engineering firms like Titan Engineering and Automation Ltd., which will then increase the existing staff strength to 18,000 individuals employed.

This method of increasing employment, increasing international competitiveness, and boosting economic growth and development simultaneously is one of the various decisions that can bring India out of the economic recession most of the countries have faced during the pandemic. The Tamil Nadu government has been subsidising and incentivising Tata as part of their new Tamil Nadu Electronics Hardware Manufacturing Policy, which aims to expand the Tamilian electronics industry's value to $100 billion by 2025.

This is great news for all Indian economists, as this fiscal step has been taken in the right direction. Helping the unemployed can then increase the funds that flow in the market, which can then further increase consumption. This cycle of consumption that the policy is attempting to trigger is rightfully timed and can help the Indian economy's future.

There is generally a parallel economy run amongst such extensive dealings. Therefore, corruption and illegal processes are a must. However, we cannot focus on those aspects when the whole economy is in turmoil. Currently, the nation will have to accept what is thrown at them in the form of this policy and a new partnership to begin the revival out of the pandemic.

This partnership's business side also brings in good news for Apple, Tata, and all other competitions both domestically and internationally. As Apple moves out of China, it will gain market popularity, as China has created a hostile and de-globalised approach in the mass population's eyes. This will attract other companies like Samsung to benefit from the lower labour costs. But, now Samsung cannot partner with the partner of its rival Apple.

This will, therefore create a new partnership in India. Samsung x Reliance? Samsung x Birla? Whatever happens, it is understood that business will come for both the international players and domestic companies. This move will be problematic for the government as they will have to incentivise and maybe forgo specific revenue streams. However, it is essential to understand that this policy is beneficial for the whole economy in the long run.