A unit of Apple Inc's (AAPL.O) Taiwanese contract manufacturer Wistron Corp (3231.TW) has won approval from Karnataka to build a new assembly facility in the south Indian state, two officials said, signaling what could be a vital expansion of iPhone assembly work in India.
The Karnataka state government has approved Wistron Infocomm Manufacturing India Pvt Ltd's application for 43 acres of land, roughly 65 km (40 miles) from the tech hub of Bengaluru, said the two officials, who asked not to be named as the deal is not public.
Wistron will invest 6.8 billion Indian rupees ($105 million) to develop this land and manufacture smartphones, internet of things (IOT) devices and bio-tech devices, one of the sources said.
The expansion of manufacturing facility could mean a widening of Apple's iPhone assembly in India as the U.S. tech giant has to pay steep duties on devices imported into the country.
Analysts see India - one of the world's fastest growing smartphone markets - as key to the Cupertino, California-based company's ambitions for a bigger global market share as smartphone sales have slowed in more mature markets.
Wistron's ICT Service Management Solutions unit currently assembles Apple's low-cost iPhone SE model in Bengaluru. Wistron also does contract manufacturing work for a broad range of other electronics brands.
Apple and Wistron did not immediately respond to requests for comment.
Boosting local assembly or manufacturing will also help Apple cut escalating labour costs in China, where its biggest contract manufacturer Hon Hai Precision Industry Co (2317.TW), widely known as Foxconn, makes a bulk of iPhones and iPads.
Reuters reported in January that Wistron was weeks away from finalizing a land deal in Bengaluru and may soon begin assembly of another Apple model.
($1 = 64.9525 Indian rupees)