A team from US-based iPhone maker Apple today met government officials to seek tax concessions for manufacturing in India where it told them it is ready with a blueprint to begin manufacturing the high-end smartphone in India, but wants fiscal concessions.
In a meeting with an inter-ministerial group headed by Department of Industrial Policy and Promotion Secretary Ramesh Abhishek, the Apple executives made a detailed presentation on its roadmap for setting up a manufacturing unit in India but sought concessions, including Customs duty waiver on import of components.
The presentation was made by senior executives of the company, including Global Vice-President (iPhone operations) Priya Balasubramanian. It cited the country's business friendly ecosystem for keenness to start local manufacturing. With sales tapering in the US and China, Apple is eyeing India -- the fastest growing smartphone market in the world -- and looking to set up a local manufacturing unit to cut costs.
It, however, does not manufacture devices on its own and rather does it through contract manufacturers. Besides exemption from the Customs duty on imports of components and equipment for 15 years, Apple wants relaxation in the mandated 30 per cent local sourcing of components.
"We've been working hard to develop our operations in India and are proud to deliver the best products and services in the world to our customers here. We appreciate the constructive and open dialogue we've had with government about further expanding our local operations," an Apple India spokesperson said.
Apple officials on Tuesday met Commerce Minister Nirmala Sitharaman to discuss "the issues".
"They (Apple) are putting their demands and the government has to consider. It has to take 360 degree view, as others (foreign companies) are already here. They want some tax concessions and all," sources in the Commerce Ministry said.
"In this case maybe they are asking for more and let's see how it goes."
"They (Apple) met the minister (Sitharaman) yesterday (Tuesday). Both the parties discussed the issues. Today (Wednesday) they are meeting all the other ministry officials. Nothing is being talked about. They have a list of demands that will be shared," the source added.
On the duty and tax-related concessions being sought by the company, the sources said most of them are within the policy domain and decisions will be taken by the respective departments. "They are seeking certain duty exemptions and other concessions. Respective departments will look at those demands," they added.
However, the ministry officials believe the process is rudimentary as of now as there are still several stages to go and a consensus needs to be reached from all ministries involved.
"It is very rudimentary as of now. There are several stages to go. They will meet the officials, make a presentation, tell what they want. The government has to decide what has to be given what is not to be given. These are simple meetings going on," sources told IANS.
"It is not DIPP (Department of Industrial Policy and Promotion) alone but several ministries in it. It all depends on how things move. There needs to be a consensus from everyone," the source said.
The official also said the company has indicated that it would gradually make India a major manufacturing hub for its products. "The company setting up its manufacturing unit in India is going to be a reality. They have full-fledged plans. There is no policy impediment. They would also bring their supply chains," the sources divulged.
In a communication to the government, the Cupertino-based technology major has asked for several tax and other incentives, including long-term duty exemptions, to enter the manufacturing sector in India.
Last year Apple's demands were rejected because of the rules but since then there has been a change in the policy, the source said.
Currently, the government provides support by way of benefits under the Modified Special Incentive Package Scheme (MSIPS) to boost electronic manufacturing. The company sells its products through Apple-owned retail stores in countries like China, Germany, the US, the UK and France, among others. It has no wholly-owned store in India and sells its products through distributors such as Redington and Ingram Micro.
The government has said that it will consider Apple's request with an "open mind."
"We will very much like Apple to come and have a base in India," Information Technology Minister Ravi Shankar Prasad told reporters last week.
