Weekly Current Affairs

Notice

‘Ministry not in favour of concessions for Apple manufacturing unit’

  • The Commerce Ministry does not favour granting concessions to American multinational tech major Apple for establishing manufacturing unit in India for products including iPhones and iPads.
  • This is because other companies have not sought similar concessions — including easing labelling and local sourcing norms as well as reducing excise and import duties — for starting manufacturing in the country, and therefore the government will not be able to relax rules only for Apple.
  • Over 40 companies are manufacturing mobile phones in the country.
  • India is among the largest smartphone markets in the world, and the Californiaheadquartered Apple is looking to expand its market-share in the segment in the country from the current level of around two per cent.
  • However, Apple only operates in premium smart phone category, where its share is much higher.
  • While setting up manufacturing plant in India — to cater to the local market and even for exports — will help cut costs given the factors including relatively lower labour costs (than say in China), duty and other concessions are expected to push up that advantage further for Apple.
  • However, the Indian government is keen that Apple does substantial value addition in the country and ensure that local supply chains grow as well — thereby generating employment, increasing manufacturing and exports.
  • Currently, there is the Modified Special Incentive Package Scheme to promote manufacturing of electronic items in India. There are incentives for investments in Special Economic Zones.
  • The government was looking into Apple’s proposal seeking exemption from 30 per cent local sourcing norms on FDI in single brand retail.