Apple Seeks ‘Special Incentive’ to Manufacture iPhones in India

Apple CEO Tim Cook. (Photo: Reuters)

A number of smartphone makers have started setting up their manufacturing units in India. The high demand for its products and the government’s Make In India program have prompted the Cupertino tech behemoth, Apple, to come to India.

However, Apple has sought incentives from the government to set up a manufacturing unit.

In a communication to the government, the Cupertino-based technology major has asked for incentives related to the Department of Revenue and Department of Electronics and Information Technology (DeITY), an official told PTI.

They are doing their due diligence from quite some time. The Department of Industrial Policy and Promotion (DIPP) will write to both the departments regarding this communication for their views.

Apple Official

There were talks about Apple’s presence in India when Tim Cook visited the country in May 2016.

At present, to boost electronic manufacturing in the country, the government provides benefits under Modified Special Incentive Package Scheme (MSIPS).

The scheme provides financial incentives to offset disability and attract investments in the electronics hardware segment. It also gives subsidies for investments in Special Economic Zones, among other benefits.

Currently, Apple's products are manufactured in six countries including Korea, Japan and the US.

Apple’s communication regarding setting up of a manufacturing unit assumes significance as the Finance Ministry in May had rejected relaxing the 30 percent domestic sourcing norms, as sought by the iPhone and iPad maker as a pre-condition for bringing in FDI to set up single-brand retail stores in the country.

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The company had sought exemption on the ground that it makes state-of-the-art and cutting-edge technology products, for which local sourcing is not possible. The government had also turned down the firm’s proposal to import refurbished phones and sell them in India.

Total import of electronics goods were valued at Rs 2.25 lakh crore in 2014-15 as against Rs 1.95 lakh crore in the previous year.

The company sells its products through Apple-owned retail stores in countries like China, Germany, the US, the UK and France, among others.

Apple does not have its owned-branded store in India, but rather sells its products through distributors such as Redington and Ingram Micro.

The government has announced incentives to promote electronic manufacturing in India and reduce the import bill.

(With inputs from PTI)