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Apple has sought modifications in the government’s phased manufacturing programme (PMP) as it plans to set up a manufacturing unit in the country.
The objective of the Electronics and IT Ministry’s PMP is to boost indigenous production of mobilephones by providing tax relief and other incentives on components and accessories used for the devices. The programme will be rolled out over a period of time.
“The Department of Electronics and Information Technology is looking at this. They want alignment of duty structures on the mobile components which it proposes to make here. Apple’s plan does not fit into the current PMP,” an official said.
The official added that the department is discussing the matter with the Cupertino-based technology major.
Under the manufacturing programme, benefits are extended to parts and sub-parts as the manufacturing ecosystem evolves. It also aims at increasing domestic value addition for setting up a robust manufacturing ecosystem in India.
An e-mail query to Apple went unanswered.
Fiscal concessions
Earlier this month, Apple indicated to the government that it is ready with a blueprint to begin manufacturing iPhones in India, but asked for fiscal concessions, including Customs duty waiver on import of components.
Apple executives had made a detailed presentation on its road map for setting up a manufacturing unit in India to an inter-ministerial group headed by Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek.
With sales tapering off in the US and China, Apple is eyeing India — the fastest-growing smartphone market in the world — and looking to set up a local manufacturing unit to cut costs.
It, however, does not manufacture devices on its own, and rather does it through contract manufacturers. Besides exemption from Customs duty on imports of components and equipment for 15 years, Apple wants relaxation in the mandated 30 per cent local sourcing of components.
The company sells its products through Apple-owned retail stores in countries such as China, Germany, the US, the UK and France. It has no wholly owned store in India and sells its products through distributors.
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