1. Apple Inc’s wish-list: Commerce Ministry says approval will invite criticism

Apple Inc’s wish-list: Commerce Ministry says approval will invite criticism

The commerce and industry ministry is unlikely to recommend special concessions to US tech giant Apple, over and above those available to other players, for setting up a manufacturing unit in India, official sources said on Tuesday.

By: | New Delhi | Published: January 4, 2017 6:34 AM
Commerce and Industry Ministry, iPhone, Apple, manufacturing, Huawei, Xiaomi, commerce, finance, MSIPS, Modified Special Incentive Package Scheme, iPad, Finance Ministry, FDI, Redington, Ingram Micro An inter-ministerial panel is likely to soon discuss Apple’s proposal. (Reuters)

The commerce and industry ministry is unlikely to recommend special concessions to US tech giant Apple, over and above those available to other players, for setting up a manufacturing unit in India, official sources said on Tuesday.

In a communication to the “highest level” of the government, Apple conveyed its wish list — which includes tax and other incentives, a conducive ecosystem and a favourable local sourcing policy — for setting up its unit here.

“They (Apple) are asking for concessions which others are not asking for. Why should they be given (those concessions),” one of the sources said.

An inter-ministerial panel is likely to soon discuss Apple’s proposal. Senior officials from the ministries of finance, industry, electronics and information technology, commerce and environment are expected to be part of the meeting.

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The commerce and industry ministry’s decision is based on the rationale that policies shouldn’t be company-specific and a level playing field must be provided to all like-minded players. The ministry is also mindful of the fact that offering incentives specifically to Apple could invite criticism from others that are going to be or have been deprived of such benefits.

To boost electronic manufacturing, the government already offers capital subsidy of 20% to units in special economic zones and 25% to those outside SEZs, among others, under the Modified Special Incentive Package Scheme of the ministry of electronics and IT. The benefits are available to both new projects as well as the expansion of old units.

Currently, Apple sells its products in India through a network of local distributors and retailers. Most of the company’s items are assembled in China, usually by Foxconn Technology.

Earlier this year, the finance ministry had turned down an application by Apple seeking a relaxation from the local sourcing rule for setting up its own stores in India. Close to four dozen companies are manufacturing/assembling mobile phones in India, including Chinese firms Huawei and Xiaomi, as India is one of the best places to set up units now. So favouring any one company is out of question, the sources indicated.

Apple has also been keen on getting permission to import and sell refurbished iPhones in India, which was rejected by the industry ministry. Earlier, the company had also sought a change in the labelling norm of the government so that the aesthetic value of its products is maintained.

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