Indian Government is looking for some policy
incentives to woo iPhone mobile Manufacturer Apple Inc and other electronics manufacturers in India .
Although India is
world’s biggest market for smartphones manufacturers .It is currently dominated by Samsung, Xiomi and other Chinese smartphone manufacturers due to low cost of their devices. Market share of iPhone mobile devices is currently
nearly 1 % in India and due to high cost of it’s devices market share might not
increase in near future. This is very well known to Apple so its plan is to
manufacture in India for the very purpose of exporting its iPhone mobiles from India.
Under
the Merchandise Exports from India (MEIS) Scheme, the government can provide duty benefits upto 2-4% depending
on the product and the country to which it is being exported. This policy is in favor of expanding India as a manufacturing hub for
electronics exports through these incentives. The government is keen to ensure
that the entire electronics manufacturing industry benefits from any change in
policy instead of sops being doled out only for Apple .
The
Ministry of Commerce(MOC) and the Department of Revenue(DOR) are concerned whether
providing specific export incentives will put the country in conflict with the
World Trade Organization’s guidelines. Both the ministry has sought inputs from Ministry of Electronics and IT for proposed policy incentives.
Apple also wants income tax
relaxation on exports, but it raises concern either it will be WTO compliant or not. Apple wants these
relaxations for 10-15 years.
In its
earlier application submitted to the Department of Industrial Policy and
Promotion, Apple had sought full duty exemption on manufacturing and repair
inputs (raw materials), yield loss on inputs, components, capital equipment
(including parts), and consumables for smartphone manufacturing and
services/repair for a period of 15 years for both domestic and export
markets. Which is not possible as per the existing policies and Government is negotiating for other proposals which may not lead to any conflicts with WTO and member countries.
The Government had, however, said it will not
offer any special concessions to Apple.
Any special privileges provided to apple will led to discrimination
to other players in the field.
Why Apple need Manufacturing in India for exports
In December 2018 ,tech Executive of Chinese Firm Huawei has been arrested in Canada in connection with US
fraud charges related to alleged Iran sanctions violations.
This led to public outrage against US in China and people have started boycotting iPhone mobile devices. Many Chinese firms has warned there employees , that they will
be fined if they will buy iPhone mobile devices. Many Chinese companies has started providing subsidies for
purchasing Chinese mobile devices like Huawei.
Already trade war is going on between US
and China raising concerns for Industries .While labour charges in China is on
rise it is on cheaper side in India and inviting technology giants for Make in India .Various initiatives
taken by present Government has caught attention of big players. With small domestic market in India Apple
is eyeing India as a manufacturing hub for exports .Once production units started, with increasing production volume of iPhone mobile devices , Indian customers can expect price cut in future.
What Benefits India can get?
Although Apple wants number of relaxation for setting up production units India. India need to set up policy for new technology enterprise ,thus promoting innovation and research in India. India will also benefit ,as other electronic manufacturers may also set up their units in India ,creating more jobs and thus making Make In India Initiative a success.
Source:Economictimes , https://www.gadgetsnow.com
1 comment:
This seems like it will be good for both Apple and also benefit India. Very well written and easy-to-read and understand.
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