While the Indian government had rejected the idea of offering special concessions to Apple to lure it into building its first manufacturing facilities in the country, it will review its policy on mobile manufacturing.
Apple had sought the concessions to set up plants in the country. The issue will be examined in depth at a high-level meeting with Apple executives next week. On Apple’s wish list is said to be a 15-year customs duty holiday on the import of iPhone kits, new and used capital equipment, and consumables. Apple’s requests are being considered by three government departments — revenue, industry and information technology.
India needs to support an iconic brand like Apple for the success of the Make in India campaign, officials said. “Our import duty is high,” one of them said. “As long as they are getting into exports, our objective should be to give them lowest duty so as to ensure that their product is competitive. Hence we may even relook at the policy as a whole.” Another official said no decision had been taken but that concessions cannot be given to just one company. “Normally, similar dispensation has to be given to others similarly placed,” he said.
A Creative Solution?
While this approach could be costly for the country in terms of revenue, a Reuters report indicates that the IT ministry may have come up with a creative solution.
India will consider Apple’s request for incentives to invest in the country with an “open mind”, Information Technology Minister Ravi Shankar Prasad told reporters on Wednesday. “We will very much like Apple to come and have a base in India,” Prasad said.
Prasad also said a government panel headed by the cabinet secretary would now clear investment proposals in the electronic sector above $1 billion, instead of them going through multiple government departments.
Prasad’s comments came after the federal cabinet revamped a subsidy program for electronic manufacturing, tightening some of its provisions following objections from the finance ministry.
Bottom line: While such incentives would technically be open to all companies, they would be limited to those companies willing to make the same levels of investment Apple proposes. The issue will be examined at a high-level meeting set for next week where state officials and Cupertino executives will meet.
India Holds Great Potential for Apple
Apple has long desired to expand its presence in India, as the country offers a huge potential market for the Cupertino firm. The country’s large population and growing middle-class offers the potential to become the company’s second-biggest market.