Govt reluctant to give special sops for Apple plant in India

The Dollar Business Bureau 

The Indian government is not likely to extend concessions to the iPhone-maker Apple for setting up its manufacturing plant, government sources said, underscoring that no other foreign firm has asked for similar kind of incentive from the government.

Last year, the US-based technology major has urged the Indian government to give tax and other market incentives to enter into the country’s manufacturing sector.

The Ministry of Commerce and Industry officials said they should not be given any such benefits since no other cellphone manufacturer has sought similar incentives from the ministry.

India is currently the best place to establish a manufacturing facility. As many as 42 manufacturers, including Chinese firm Huawei and Xiaomi, are making mobile phones in India.  

However, the government has still decided to consider Apple’s request, and several senior officials from various ministries, including the commerce and finance ministries, would meet later this month to deliberate on the incentives sought by the Cupertino-based company to set up a manufacturing unit in the country.

The government already extends benefits under its Modified Special Incentive Package Scheme (MSIPS) to enhance electronic manufacturing in the country. The scheme facilitates financial incentives to offset disability and further attract foreign investments in the country’s electronics hardware segment. Among other benefits, it also provides subsidies for investments in Special Economic Zones (SEZs).

Last May, the Finance Ministry rejected easing the 30% domestic sourcing norms which the iPhone and iPad maker had demanded in order to set up its single-brand retail stores segment in India. Apple pitched its state-of-the-art and cutting edge production technology in the manufacture of its phones and claimed India’s local sourcing will not meet its requirements. Therefore to meet its product expectations it is seeking exemptions and sops.

But the Indian government refused Apple’s demands and also shot down its proposal to ship refurbished phones and sell them in the country.

Apple has manufacturing plants in six countries, including Japan, South Korea and the US. The company distributes its products through Apple-owned retail stores in countries including China, France, Germany, the US and the UK, among others. It does not have wholly-owned stores in India but sells its products through distributors.