Indian authorities have warned Tata Electronics that one of its key iPhone component factories could face closure after regulators alleged the facility contaminated groundwater used by nearby farms.

The factory, located in Hosur, manufactures iPhone back panels and other components for Apple. It plays a critical role in Apple's strategy to expand production in India and reduce dependence on China.

According to a notice issued by the Tamil Nadu Pollution Control Board, inspections conducted between December 2025 and May 2026 found that wastewater from the plant was discharged into a rainwater harvesting pond within the facility. Regulators alleged that the pond overflowed, contaminating groundwater and open wells used by neighboring agricultural lands.

The pollution board said Tata had failed to implement corrective measures requested in a previous notice issued in December 2025. As a result, authorities asked the company to explain why power supply should not be disconnected and operations suspended.

Tata Electronics rejected the allegations, stating that an independent assessment by an accredited laboratory found the facility to be fully compliant with environmental regulations. The company said it remains committed to responsible environmental practices and has responded to regulatory authorities.

The case adds to a series of challenges affecting Apple's growing manufacturing network in India. Previous disruptions included a fire at the Hosur facility in 2024 and earlier production interruptions at other supplier plants.

The issue comes at a crucial time for Apple, as India is expected to produce roughly 26% of global iPhone output in 2026, up from just 6% four years earlier. Any disruption at Tata's facility could draw increased attention to environmental compliance and operational risks within Apple's rapidly expanding Indian supply chain.

Investors and industry observers will now watch closely for Tata's response and any further action from regulators that could affect production at one of Apple's most important manufacturing partners in India.