Apple Inc to flourish if it pours funds into India

NEW DELHI: The government may agree to some of Apple’s demands for setting up a manufacturing unit in India if the maker of iPhones promises a huge investment and commits to generating lakhs of jobs, a senior government official has said.

It depends on what the company brings to the table, though the government will not do anything to disturb the momentum of mobile manufacturing in the country, as almost 40 units have already come up, the official said.

ET had last week reported Apple seeking relaxed labelling rules so it doesn’t have to put product-related information directly on its devices to avoid cluttering up their minimalist design. The company also wants tax incentives — a demand that is being examined by the finance ministry.

The Department of Industrial Policy and Promotion ( DIPP) forwarded Apple’s request to the Department of Revenue and Ministry of Electronics and Information Technology (MeitY) in November.

“They have just sent it (the request). We will examine it,” said the official, requesting anonymity. “There are two things: First, there are almost 40 mobile manufacturing units (in India). We don’t want to disturb them. Second, we will have to see how much volume they will put out, how many jobs they will create,” the official said.

The company manufactures products in six countries, with China accounting for most of the production.

“Their factory in China gives jobs to 10 lakh people. If they say they will put five factories in India and give employment to 10 lakh people or say we will give you Rs 5,000 crore of excise duty, we may think about it (Apple’s demands),” the official said.

According to some reports, a group of senior officials from the departments of commerce, industrial policy and promotion, revenue, environment and forest, electronics and information technology will deliberate on giving incentives to Apple for setting up its manufacturing unit, in a meeting slated for the first week of January.

Apple’s journey in the country has been bumpy with the finance ministry rejecting the company's earlier proposal to set up wholly owned outlets, for which it had sought exemption from the compulsory 30% local sourcing norm. Another of its demand — to sell refurbished phones in the country — was shot down by the government earlier last year.

Apple is said to be planning making iPhones for the Indian market in Bengaluru. Wistron, a Taiwanese OEM maker for Apple, is setting up a facility in Peenya, the city's industrial hub, to manufacture the phones.

The facility will start production in April. Apple is also said to be “very serious” about beginning assembly operations — and, thereafter, full manufacturing — in India by the end of next year.