1. Centre reluctant, but Karnataka more than happy to accommodate Tim Cook led Apple Inc

Centre reluctant, but Karnataka more than happy to accommodate Tim Cook led Apple Inc

Even as the government of India has expressed certain reservations on giving out the concessions sought by Apple to set up its manufacturing plant in India, the company is likely to select Karnataka as the location to set up its facility.

By: | Bengaluru | Published: January 5, 2017 6:27 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 Apple has shown interest in setting up a manufacturing facility in India. (Reuters)

Even as the government of India has expressed certain reservations on giving out the concessions sought by Apple to set up its manufacturing plant in India, the company is likely to select Karnataka as the location to set up its facility. Apple has already held talks with the Karnataka government in this regard, a senior minister said.

“We are in talks with the officials of Apple Inc regarding setting up of their new facility in and around Bengaluru. We have already held preliminary discussions with their officials in this regard,” R V Deshpande, minister for large and medium industries, government of Karnataka told FE.

He said the state government is keen to have Apple’s investment in the state and is willing to provide them with the required infrastructure. However, the details of Apple’s requirements and exact investment is yet to be made known to the state government, Deshpande said.

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“I would not like to talk about the details at this stage. Some people from the company have met me and had talks with me on the phone. They have shown interest to set up their manufacturing plant in Karnataka. Apple will come to Karnataka 100%,” Deshpande added.

The California-based smartphone maker has been in talks with the Central government for certain concessions before it finalises its investment proposal. Apple has shown interest in setting up a manufacturing facility in India. However, the company had demanded for exemptions from local sourcing of inputs for its manufacturing. Besides, it had also asked the government several tax concessions.

In a communication to the government Apple had conveyed its wish list that includes tax and other incentives, a conducive eco-system and a favourable local sourcing policy for setting up its unit in India.

“They are asking for concessions which others are not asking for. Why should they be given those concessions,” a government source said.

This is a second attempt by Apple to set its foot in India in terms of local manufacturing. Earlier, its proposal to import and sell refurbished products in India was rejected by the government.

Currently, Apple is selling its products in India through a network of local distributors and retailers. It has arrangements with Imagine and iStore. By setting up its own manufacturing plant in India, Apple wants to grow its market share, which is a low single digit currently and take on the competition from Korean rival Samsung Co, which has over 20% share in the Indian smartphone market.

Apple imports products from China, which are made by Foxconn Technology and sold in India.

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