© Reuters. FILE PHOTO: A salesman uses his iPhone at a mobile phone store in New Delhi

By Sankalp Phartiyal

NEW DELHI (Reuters) - Taiwan's Wistron Corp plans to assemble printed circuit boards (PCBs) for iPhones at its new plant in southern India, two sources said, highlighting Apple (NASDAQ: ) Inc's push to expand manufacturing in the world's second-biggest smartphone market.

The local assembly of PCBs by Wistron's India unit will be a first for the contract manufacturer, which began making Apple's low-priced SE model in the southern tech hub of Bengaluru in 2017. It currently assembles the 6S and 7 iPhone models there as well.

A PCB is a bed for key components such as processors, memory and wireless chip sets that are the heart of an electronic device. Once assembled, or populated with components, PCBs account for about half the cost of a smartphone.

Wistron's second iPhone plant, some 65 km (40 miles) from Bengaluru, is expected to become operational by April, the sources said, adding that it will make iPhone 7 and 8 models, some of which will be exported.

The facility will be capable of producing up to 8 million smartphones annually, they said.

The plan is part of Wistron's 30 billion rupee ($422.12 million) investment proposal submitted to the Karnataka state government in 2018.

Wistron's bigger rival Foxconn, which began making iPhone XR models in India last year, already assembles PCBs for those devices locally.

The deepening of PCB assembly in India will help Cupertino, Calif.-based Apple save on import taxes on smartphone components, levied by Prime Minister Narendra Modi's government to boost local manufacturing and create new jobs.

On Saturday, India said in its federal budget that it will from April begin taxing imports of populated PCBs at a higher 20%, from the previous rate of 10%.

Apple declined to comment. Wistron did not respond to a request for comment.

Apple, which still makes most of its iPhones in China, has gradually moved to expand production in other countries as Washington and Beijing wage a disruptive battle over trade and technology.

In India, a market with 1.1 billion wireless connections and about 480 million smartphones, Apple's premium devices have proven too costly for many consumers. The company's market share by shipment volumes is just over 1%, though it was among the fastest growing smartphone brands in India in the quarter to Dec. 2019, according to market researcher Counterpoint.

India remains largely dependent on China for supplies of smartphone parts such as cells, display panels, camera modules and printed circuit boards.

The coronavirus outbreak in China could cause a delay in Wistron and Apple's plans for India, one of the sources said.

The epidemic, which has killed more than 250 so far, threatens to disrupt India's production of smartphones if it continues to spread, Reuters reported previously.