 "Apple won't print details on iPhones, wants concessions for 'Make in India'")
US-based iPhone maker Apple wants concessions like relaxation in labelling rules, so it doesn’t have to print product info on its devices, and tax incentives in return for setting up a manufacturing unit in the country, the Economic Times reported while citing a government official. The government is deliberating on the company's request.
Citing the same official, the financial daily said that the Department of Industrial Policy and Promotion (DIPP) had forwarded the iPhone maker’s request to the Department of Revenue and Department of Electronics and Information Technology (DeITY) in November. A group of senior officials from various ministries, including commerce and finance, will early next month deliberate on the incentives sought by Apple.
What are the concessions Apple has sought?
According to various reports, Apple wants to provide product related information on the product's packaging or as part of its operating system. According to the ET report, the company does not wish to tinker with its design language, which is what lends its products, in part, their distinctive edge with many consumers. Currently, Indian laws require for such information to be printed on the product itself.
In a communication to the government, the Cupertino-based technology major has asked for several tax and other incentives to enter India in the manufacturing sector. As reported earlier by Business Standard, senior trade ministry authorities in recent weeks met to discuss the matter.
What does Apple gain?
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Making goods such as iPhones locally would allow Apple to open its own stores in India, helping build its brand in a country where it has just a tiny slice — less than five per cent — of a booming smartphone market.
The company sells its products through Apple-owned retail stores in countries like China, Germany, the US, the UK and France, among others. It has no wholly-owned store in India and sells its products through distributors such as Redington and Ingram Micro.
Further, next year, India’s smartphone market is expected to overtake that of the US as the world’s second-largest behind China, according to research firm IDC. For years, sales in China fuelled Apple’s expansion, but now growth there is slowing.
Earlier, the finance ministry in May had rejected relaxing the 30 per cent domestic sourcing norms, as sought by the iPhone and iPad maker as a pre-condition for bringing in FDI to set up single-brand retail stores in the country.
The company had sought exemption on the ground that it makes state-of-the-art and cutting-edge technology products for which local sourcing is not possible.
The government had also turned down the firm's proposal to import refurbished phones and sell them in India.
What is the government doing about it?
With regard to looking into the company's requested concessions, officials from the departments of commerce, DIPP, revenue, environment and forest, and DeITY will attend the reported meeting on the matter.
The group is likely to meet in the first week of January to discuss the issue, sources said.
However, government sources said the technology-major should set up the manufacturing unit in India without seeking additional support.
"Several companies in India are manufacturing mobile phones in India. Nobody is asking for additional incentives. Currently, the government provides sufficient support to boost electronic manufacturing," they added.
The government provides benefits under Modified Special Incentive Package Scheme to boost electronic manufacturing in the country.
The scheme provides financial incentives to offset disability and attract investments in the electronics hardware segment. It also gives subsidy for investments in Special Economic Zones, among other benefits.