Govt unlikely to offer incentives to Apple
NEW DELHI: The Centre is unlikely to offer extra incentives to persuade Apple Inc. to manufacture its iphones and ipads in India, two government officials said.
India is keen to get Apple to produce its smartphones here, through its manufacturing partner Foxconn, but Apple has sought several incentives and tax sops from the government before it agrees to manufacturing iphones in India.
“Apple has been looking for several duty and tax incentives for manufacturing handsets in India, but the government is unlikely to make exceptions for one company,” said a top government official, requesting anonymity. The official said that an exception for the iphone manufacturer will defeat the purpose of an integrated policy such as Make-in-india.
Three departments in the Indian government are looking into Apple’s list of demands — the department of industrial production and promotion, department of revenue and department of information and technology.
“Apple wants import duty exemptions on mobile-components, since there are not many high-end phone-component makers in India to buy from,” said another government official, who did not wish to be named. The talks are ongoing, he added.
Apple CEO Tim Cook during his trips to India had said that the firm was looking at India as the next big market.
The government already offers several incentives, including differential duty structure, modified special incentive package scheme (MSIPS) and zero-duty on import of all components except adapters, batteries and headsets, for global and local manufacturers, under the Make in India programme.
Aimed at promoting electronic manufacturing, MSIPS provides capital subsidy of 20% in special economic zones (SEZS) and 25% in non-sezs, in the form of reimbursement of excise for capital equipment. For high-capital investment projects, it provides for reimbursement of certain central taxes.
Also, if a handset-manufacturer assembles phones locally, then it just pays a 1% duty, instead of the 12.5% on a phone that is imported.
However, Apple seems dissatisfied with just these benefits.
Trade minister Suresh Prabhu recently expressed support for Apple if they were to start manufacturing in India, PTI had reported.