Govt nudges Apple Inc to increase Indian operations' scope

Apple has started to export iPhones to some European markets from India, which boosts the government's 'Make in India' and also the company's projection of making India an export hub.

Govt nudges Apple Inc to increase Indian operations' scope

New Delhi: Hailing its presence in the country, IT Minister Ravi Shankar Prasad on Monday asked Apple Inc to scale up operations in India from its current presence where the US-based smartphone maker and technology giant has just started manufacturing phones and components for both domestic use and exports purpose while Revenue Department has assured it would look into the levies issues in the sector.

"Apple has started manufacturing phones in India including components. They have started making iPhones in India and also components both for exports. But this is just a tip of the iceberg. I want a robust presence of Apple in India. A super robust presence of Samsung in India. Apple is also on board as far as the India story in concerned," Prasad told media after a roundtable discussion with CEOs of global manufacturing companies who raised issues of tariffs, taxes, single window clearance, component manufacturing, among others.

Revenue Secretary Ajay Bhushan Pandey, who was there at the roundtable to listen to the the levies and customs duty challenges from the companies, has assured them to look into the taxation structure.

Taiwan this month dragged India to the WTO on trade tariffs on electronic items. The items on which India imposed duties include base stations, machinery and accessories needed for electronic chip wafer manufacturing, digital cameras, headphones, microphones, loud speakers and items used by telecom industry.

Electronic goods are mostly at 18 per cent, cellular mobile handsets are at 12 per cent while LCD/LED TVs attract GST of 28 per cent.

Apple has started to export iPhones to some European markets from India, which boosts the government's 'Make in India' and also the company's projection of making India an export hub.

The Cupertino-headquartered company's contract manufacturer Wistron Corp's India arm is now exporting smart phones from the Bengaluru facility.

Wistron had started assembling iPhones in the country back in 2016.

Recently, the government allowed, under new norms of single brand retail, that all procurements made from India by a single-brand retailer for that brand shall be counted towards local sourcing, irrespective of whether the goods procured are sold in India or exported - which was a major relief for companies like Apple Inc.

The new norms also allow firms to open online shops before setting up a physical store, which too helps Apple in its India plans.

Though Prasad declined to link India's opportunity to become a manufacturing hub for electronics due to the US-China trade war, it is believed that Apple's suppliers and partners like Foxconn or Wistron have been hinted by the US company to move production outside China gradually to some extent.

Prasad said the government will roll out, in the next 2-3 months, a complete roadmap including incentives and sops to push these companies to scale up their manufacturing and export commitments.

Leading names in the electronics and manufacturing industry including Vivo, Oppo, Qualcomm, Xiaomi, Dell, HP, Bosch, Cisco, Flextronics, Foxconn, Nokia, LG, Panasonic, Intel, Wistron, and Sterlite Technologies attended the meeting.

The Niti Aayog will bring out a plan soon in this regard in consultation with the IT Ministry, Prasad added.

In the past years, the government's measures to promote electronics manufacturing include the modified special incentive package scheme, the phased manufacturing programme, electronics manufacturing clusters and the electronics development fund.

Manufacturers Association of Information Technology (MAIT) President Nitin Kunkolienker said during the discussion, the industry body highlighted the need for creation of a component manufacturing hub in India that needs to be promoted aggressively by incentivisation by the government.

The recommendations include offering a production-linked export incentive, leveraging India's geo-political influence and FTA influence with countries to accept BIS and TEC standards as sufficient to access to their markets.

India has set its sight on creating a $400 billion (around Rs 28.43 lakh crore) electronic manufacturing ecosystem by 2025, and notified a new policy to boost manufacturing activities.

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