An inter-ministerial panel on Wednesday took up the proposal of American multinational tech major Apple to start full-fledged manufacturing operations in India. The high-level panel -- including officials from the departments of industrial policy & promotion, commerce, revenue, electronics and information technology and environment & forest – gave a patient hearing to the company’s demands including tax and duty concessions to help it go ahead with its ‘Make In India’ plans, but did not take a final call on the matter, official sources said.
"They (Apple) are seeking certain duty exemptions and other concessions. The concerned departments will consider those demands. The government has not taken any decision," an official said. On Tuesday, top-level executives of Apple including its vice president (operations) Priya Balasubramaniam had met commerce & industry minister Nirmala Sitharaman and made a comprehensive presentation on their proposal for establishing manufacturing unit in India for products including iPhones and iPads. Apple is learnt to have sought concessions including easing labelling and local sourcing norms as well as reducing excise and import duties for itself and its component manufacturers to start manufacturing in the country. Apple executives declined to talk to the media. A majority of the company’s manufacturing operations is currently based out of China.
Though there are over 40 companies are manufacturing mobile phones in the country, none of them have demanded the sort of concessions that Apple has sought for manufacturing in India, the sources said. Currently, there is the Modified Special Incentive Package Scheme to promote manufacturing of electronic items in India. There are incentives for investments in Special Economic Zones. India is among the largest smartphone markets in the world, and the California-headquartered Apple is looking to expand its market-share in the segment in the country from the current level of around two per cent. The plan to start full-fledged manufacturing operations in India is part of its strategy to have production facilities closer to its markets, the sources said. While setting up manufacturing plant in India -- to cater to the local market and even for exports -- will help cut costs given the factors including relatively lower labour costs (than say in China), duty and other concessions are expected to push up that advantage further for Apple. However, the sources said the Indian government is keen that Apple does substantial value addition in the country and ensure that local supply chains grow as well – thereby generating employment, increasing manufacturing and exports.
