MeitY Op­ti­mistic About Ap­ple’s Pro­duc­tion Plan

The Economic Times - - Companies: Pursuit Of Profit - Mun­tazir.Ab­bas

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New Delhi: The Min­istry of Elec­tron­ics and IT (MeitY) is op­ti­mistic that the iPhone maker Ap­ple would soon be able to start lo­cal pro­duc­tion through its con­tract man­u­fac­turer and take ad­van­tage of In­dia’s read­ily avail­able skilled work­force.

“We are sup­port­ive of Ap­ple’s pro­posal (to man­u­fac­ture in In­dia)," MeitY ad­di­tional sec­re­tary Ajay Ku­mar told ET, though a fi­nal de­ci­sion is yet to be taken on the is­sue. Be­yond de­vices, Ap­ple’s mo­bile pay­ment ser­vice also ties in well with In­dia’s move grad­u­ally shift­ing to a less cash econ­omy, he added. On Jan­uary 25, a six-mem­ber Ap­ple team led by its vice pres­i­dent for op­er­a­tions Priya Bala­sub­ra­ma­niam and gov­ern­ment af­fairs head Ali Khanafer, met cen­tral gov­ern­ment of­fi­cials in­clud­ing the De­part­ment of In­dus­trial Pol­icy & Pro­mo­tion (DIPP) to dis­cuss the con­ces­sions Ap­ple sought. The Tim Cook-headed com­pany has sought fis­cal con­ces­sions, in­clud­ing cus­toms duty waiver on the im­port of com­po­nents re­quired for lo­cal man­u­fac­tur­ing. “This is not un­com­mon when com­pa­nies ask for cer­tain in­cen­tives to start pro­duc­tion,” Ku­mar said. A ma­jor hur­dle is with Ap­ple’s de­mand seek­ing a 15-year ex­emp­tion on coun­ter­vail­ing duty (CVD) on im­ported com­po­nents, a de­mand In­dia may find dif­fi­cult to ac­cept un­der the soon to be rolled out goods and ser­vices tax (GST).

Rev­enue sec­re­tary Has­mukh Ad­hia re­cently told ET that there can’t be in­di­vid­ual ex­emp­tions un­der GST which will sub­sume cen­tral taxes such as cen­tral ex­cise, ser­vice tax, coun­ter­vail­ing duty and state taxes in­clud­ing val­ueadded tax, oc­troi and pur­chase tax. It is ex­pected to be im­ple­mented from July 1. Coun­ter­vail­ing duty is levied as part of im­port duty in lieu of cen­tral ex­cise duty.

But DIPP, which is an­chor­ing the Ap­ple­gov­ern­ment talks, re­cently in­di­cated that a way could be found with some tweaks to ex­ist­ing pol­icy but stressed that any change will be for the in­dus­try as a whole and not for any one com­pany.

Ku­mar re­jected al­le­ga­tions by the lo­cal in­dus­try of gov­ern­ment bias to­wards Ap­ple, say­ing it’s too pre­ma­ture. “We have not reached any de­ci­sion yet on Ap­ple’s de­mands. But we are hope­ful about the dis­cus­sions that are go­ing on,” he said.

Ap­ple’s mo­bile pay­ment ser­vice also ties in well with In­dia’s move to grad­u­ally shift to a less-cash econ­omy

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