The plant produces vital components, such as back panels, for iPhones, and another facility in the complex was scheduled to start assembling iPhones later this year. Tata, one of Apple’s newer suppliers in India, is part of the company’s strategy to diversify its production outside China. Analysts had estimated that India would contribute 20-25% of Apple’s total iPhone shipments in 2024, up from 12-14% last year. With 20,000 workers employed at the fire-affected plant, there is uncertainty about how this disruption will impact production timelines.
Impact on Festive Season Sales
Hong Kong-based Counterpoint Research estimates that 1.5 million iPhone 14 and 15 models were set to be sold in India during the festive season, which runs from late October to early November. However, the fire may prevent Apple from fulfilling up to 15% of that demand, potentially causing a shortfall of 150,000 to 225,000 units.
To compensate, Apple may need to import more components from other regions or divert export inventory to India. Some industry sources suggest Apple’s suppliers have enough stock to cushion the immediate impact, but if production remains suspended for an extended period, Apple could shift more operations to China to meet its supply needs.
Setback for ‘Make in India’
The fire at Tata’s plant is a blow to India’s “Make in India” initiative, which aims to position the country as a global manufacturing hub. Apple has been moving some of its supply chain operations to India as part of efforts to reduce dependence on China. However, supply chain disruptions like this fire, as well as earlier incidents at suppliers Foxlink and Pegatron, have raised concerns about India’s ability to handle large-scale electronics manufacturing.
Despite these challenges, experts believe these are temporary setbacks. Prabhu Ram, Vice President at Cybermedia Research, emphasized that improvements in safety and operational standards are necessary to strengthen India’s role as a global electronics manufacturing hub.
A Repeat of 1989?
The incident draws comparisons to a similar event in 1989, when a fire at India’s Semiconductor Complex Limited (SCL) shattered the country’s dreams of becoming a global semiconductor leader. Despite early successes, a mysterious fire destroyed critical equipment, and it took years to restart operations.
