Apple CEO Tim Cook and Amazon chief Jeff Bezos are understood to have assured Prime Minister Narendra Modi about their intent to step up investments in India. The assurances came during a meeting of delegation of American CEOs with the PM on Sunday. The government would be keen to step up investments from the US as in FY17 foreign direct investments from the country dropped by almost half to $2.4 billion from $4.2 billion in FY16. Apple’s commitment towards investments in the country assumes significance since it comes at a time when the company is negotiating with the government for a slew of tax concessions for manufacturing its phones in the country.
Sources said that the government is seeking details of the investment from the company and the amount of jobs it would create before making any commitment. At the Sunday meeting, Cook is understood to have briefed Modi on the company having started production of the phones at its assembly plant in Karnataka last month. He told Modi how the company has trained a large number of iOS developers. He also told the PM that Indian developers have created more than 100,000 apps for its app store. Apple wants to expand its manufacturing in India for which it wants tax concessions.
India is seen as important for Apple since its growth in the US and China is slowing. In 2016, Apple shipped 2.5 million iPhones into India. Though this was its best year ever in terms of revenues and sales, it still ranked 10th among vendors in the December quarter according Counterpoint Research. Apple accounts for about 3% of shipments in India, where an estimated 750 million smartphones will be sold by 2020.
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However, Apple is seen as a leader in the premium segment smartphones which are priced upwards of Rs 30,000. On his part, Amazon’s Bezos, who has already committed investments to the tune of $5 billion, said that the company will keep investing and growing in India. After his meeting with Modi, Bezos tweeted: “Terrific meeting with @narendramodi. Always impressed, energized by optimism and invention in India. Excited to keep investing and growing.”
The company has been aggressively investing in setting up fulfilment centres across the country to ensure speedy delivery to consumers. It has 41 such warehouses across 13 states. Its seller base in the country has also increased to 2 lakh currently, from 100 in 2013. Bezos had earlier said that the company will keep investing in the Indian market to strengthen technology and infrastructure. Cook and Bezos were among the 20 US business leaders who interacted with Modi as part of a roundtable interaction. Others in the group included Google’s Sunder Pichai, John Chambers from Cisco, Shantanu Narayen from Adobe and Ajay Banga from Mastercard.