The Ministry of Electronics and IT (MeitY) is optimistic that the iPhone maker Apple would soon be able to start local production through its contract manufacturer and take advantage of India’s readily available skilled workforce.
On January 25,a six-member Apple team led by its vice president for operations Priya Balasubramaniam and government affairs head Ali Khanafer, met central government officials including the Department of Industrial Policy & Promotion (DIPP) to discuss the concessions Apple sought. The Tim Cook-headed company has sought fiscal concessions, including customs duty waiver on the import of components required for local manufacturing.
A major hurdle is with Apple’s demand seeking a 15-year exemption on countervailing duty (CVD) on imported components, a demand India may find difficult to accept under the soon to be rolled out goods and services tax (GST).
Revenue secretary Hasmukh Adhia recently told ET that there can’t be individual exemptions under GST which will subsume central taxes such as central excise, service tax, countervailing duty and state taxes including value-added tax, octroi and purchase tax. It is expected to be implemented from July 1. Countervailing duty is levied as part of import duty in lieu of central excise duty.
But DIPP, which is anchoring the Apple-government talks, recently indicated that a way could be found with some tweaks to existing policy but stressed that any change will be for the industry as a whole and not for any one company.
Karnataka has already confirmed that Apple is planning to commence initial manufacturing operations in the Bengaluru’s Peenya industrial area, which will “foster cutting edge technology eco system and supply chain development in the state, which are critical for India to compete globally”.
Globally, Apple is pushing its Apple Pay service and its user base surged three-fold in 2016 with a 500 per cent growth in transaction volume year-on-year. The payment platform is currently available in 13 markets and was recently launched in Russia, Spain, Japan and New Zealand.
By Baishakhi Dutta