Tata Group is in advanced talks with Taiwan's Pegatron to form a partnership to run an iPhone assembly plant the Indian company is building in the southern state of Tamil Nadu, two sources with direct knowledge of the matter said on Thursday.

Tata is building the iPhone assembly plant in Hosur city, which will be its second such facility in the country. The move comes as Apple and its contract manufacturers are rapidly expanding their India operations.

Tata is in talks to form a joint venture with Pegatron for the Hosur plant - its first such initiative - that would help speed up its plans to start manufacturing, said the two sources, who declined to be named as the talks are private and the deal has not been closed.

The Taiwanese firm would provide technical and engineering support at the plant, the sources said.

Pegatron did not immediately respond to a request for comment outside business hours in Taiwan. Tata and Apple also did not immediately respond.

Tata's success is crucial to Apple's ambitions. The U.S. firm has been diversifying beyond China following COVID-19 disruptions and geopolitical tensions and the proportion of iPhones made in India is expected to reach 20-25% this year, from 12-14% in 2023, according to Apple analyst Ming-Chi Kuo.

Tata's new plant with Pegatron is expected to have 20 lines for iPhone assembly, one of the sources said, adding that the Indian firm would hold a majority stake in the joint venture.

"Tata cannot build everything from scratch," said the second source, explaining the rationale behind the tie-up.

Tata's first iPhone assembly plant is in the southern state of Karnataka which it took over from Taiwan's Wistron last year.

Independently, Pegatron already operates an iPhone assembly plant in Tamil Nadu and is in talks to add a second facility. It currently accounts for about 10% of Apple's iPhone output in India, with Taiwan's Foxconn accounting for most of the rest.

(Reporting by Munsif Vengattil in Bengaluru and Aditya Kalra in New Delhi; Editing by Mark Potter)