According to two people with firsthand knowledge, Pegatron is in advanced talks to give the Tata Group control over its sole iPhone manufacturing site in India. This represents the Taiwanese company’s most recent retraction of its Apple collaboration.

As per one of the sources, the deal, which has Apple’s support, calls for Tata to own at least 65% of a joint venture that will run the Pegatron plant near Chennai in the southern Indian state of Tamil Nadu, with the Taiwanese company holding the remaining share and providing technical support.

According to the second source, Tata, one of the biggest companies in India, will run the joint venture through its Tata Electronics division.

About 10,000 people work at the Pegatron India plant, which produces five million iPhones a year. It is the company’s final such operation, having lost control of an iPhone factory in China to rival Luxshare in a $290 million deal last year.

Emails asking for comments were not answered by Tata or Pegatron. Apple said it would not comment. The sources withheld the ongoing negotiations’ financial information.

As Beijing and Washington continue to engage in geopolitical conflicts, Apple is progressively attempting to diversify its supply chain outside of China. The Chennai Pegatron plant will support India’s Tata’s plans to manufacture iPhones.

In addition to establishing another iPhone assembly facility in Hosur, Tamil Nadu, where Pegatron is probably going to become its joint venture partner, Tata already runs one in the nearby southern state of Karnataka, which it took over from Taiwan’s Wistron last year.

Following Friday’s disastrous jobs data, benchmark U.S. Treasury rates reached their highest level since November, keeping all three in check.

According to the first source, Pegatron has been developing another iPhone manufacturing at its Chennai location for several months, and taking over that facility is part of the Tata merger talks.

The initial source stated that the negotiations between Tata and Pegatron about the factory are anticipated to conclude in six months, at which point all of Pegatron India’s staff will transfer to the joint venture company.

There are now three Indian contract producers of Apple iPhones: Foxconn, Pegatron, and Tata. Tata is essential to Apple’s expanding goals in India, where analysts predict that the country will account for 20–25% of all iPhone shipments this year, up from 12–14% in the previous year.

It was unclear why Pegatron has gradually stopped doing business with Apple, particularly in India. Pegatron stated last year that the purpose of the China plant purchase was to raise money in order to “optimise its business.”

(Adapted from Reuters.com)