The Ministry of Electronics and IT (MeiTY), along with the departments of commerce and revenue will take a “coordinated” view on Apple’s conditions for local production in India though an investment from the iPhone maker will be considered a “marquee” one, a top official said.
IT Secretary Aruna Sundararajan told that India is looking at Apple’s as a “marquee investment” as part of the government’s efforts to rope in large-sized companies that invest somewhere between Rs 100 to Rs 250 billion as a part of phase- II of the electronics manufacturing initiative that has attracted Rs 1.32 lakh crore so far from nearly 50 mid-to-large companies.
Top executives of the US-based company will be meeting government officials on January 22 about its plans to kick-off manufacturing in India for which it has sought a slew of incentives including a 15-year holiday on customs duty.
Apple executives would be meeting the Department of Industrial Policy & Promotion (DIPP) officials to discuss policy intervention initially.
Sources have previously told ET that the government won’t offer any special concessions to Apple but it is reviewing its entire policy on mobile phone manufacturing as part of an effort to promote the ‘Make in India’ initiative. This could meet some of the sops Apple has sought apart from benefitting other phone makers. The government is to be keen to bring in big-ticket multinationals in the country to set a precedent in order to attract significant investments for the ambitious Make in India program.
The Cupertino-based iPhone maker has sought full duty exemption on manufacturing and repair materials, components, equipment and consumables for mobile phones manufacturing and after-sales support for a period of 15 years.
MeitY official say mobile manufacturing in India has grown exponentially since the duty differential regime was introduced in 2014, making imported devices more expensive than locally assembled ones.
Tim Cook-driven Apple also wants to take benefits of India’s Make in India policy and have plans to serve offshore regional markets from the country, which, according to analysts, could be a big blow to China if the company’s large-scale production moves to India.
China’s labour cost has increased significantly, prompting multinationals’ to prefer India, she said. Apple relies on contract manufacturer Foxconn to assemble smartphones in China and has 14 device assembly facilities there.
The US-based device maker’s aggressive India push comes in the backdrop of the US President-elect Donald J Trump’s bid to discourage companies from offshoring manufacturing to rival China and proposing to levy a 45 per cent tariff charge on Chinese-made goods.
By Baishakhi Dutta