NEW DELHI: India will allow Apple to import some components at zero duty in return for the iPhone maker agreeing to scale up local manufacturing in a phased manner over the coming years, said Aruna Sundararajan, secretary for the ministry of electronics and IT.
The ministry is currently in discussions with Apple on its proposal to manufacture in India for which the Cupertino, US-based firm had sought a slew of concessions, including duty waiver for its component manufacturers for 15 years.
Speaking to ET, Sundararajan said the government is trying to reach a common ground with Apple so that the company can start full-fledged manufacturing here. She said the government agrees that some components required by Apple can’t be immediately manufactured in India and so it has made a list of products that can be imported duty free till they are ready to be produced locally. Apple also has submitted a list of components on which it is demanding duty exemptions for its suppliers. The government is trying to find a common ground keeping the interests of both sides in mind, she said.
“They are saying that some of their components cannot be manufactured in India because that requires certain kind of manufacturing capability. Our roadmap for indigenisation also envisages only those products that can be (locally) manufactured.
There are many products that we also admit that cannot be manufactured, so they can be imported duty free,” said Sundararajan, adding that Apple is also ready to manufacture some components locally through partners. “So, now we are trying to see that their roadmap for indigenisation and ours can be harmonised.”
According to industry experts, Apple is asking for special concessions for its component manufacturers over and above what is already been offered by the Indian government. After the government announced incentives for domestic manufacturing, several companies set up local factories, but most of them are assembling phones here while largely importing components.
Component manufacturers which have set shop in the country are largely catering to the low-end feature phones.
The government recently notified the phased manufacturing programme under which it has set a timeline for locally manufacturing of mobile phone components.
For instance, the programme covers mechanics, die cut parts, microphone and receiver, keypad and USB cable in the current financial year. It aims to promote local manufacturing of populated printed circuit boards, camera modules and connectors in 2018-19, and display assembly, touch panels, vibrator motor and ringer in 2019-20.
Sundararajan said the government has defined different components that will be ready to be manufactured over the next three, five or seven years. “So Apple’s roadmap is slightly different (from ours) and we are looking at harmonising it.”
Source: economictimes.indiatimes.com