MeitY Optimistic About Apple’s Production Plan
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