US-based Apple Inc is in discussions with the Centre to substantially expand its manufacturing operation in India through its contract manufacturer here. IT minister Ravi Shankar Prasad said on Tuesday that Apple was in touch with government officials for scaling up operations in India. Currently, the company manufactures the iPhone SE model through Taiwanese firm Wistron in Bengaluru.
IT secretary Aruna Sundararajan later said that the Apple has indicated a plan for its entire product range and has also shared a road map with the government for indigenous manufacturing of the components that go into making iPhone models. “Right now what they’ve started is very small. They’re talking of a much larger plan where they want to bring in the whole ecosystem… They definitely intend to make all their products, is what they’ve told us, in the next phase, for which they are evaluating various options,” she said. Apple did not respond to a query by The Indian Express.
The ministry is also trying to get the US firm to align its plans with the government’s roadmap for indigenisation. “The first thing they requested us was 15 years of duty free imports of the components. They’ve also indicated that they have a road map for indigenisation. Some of their components will start being manufactured out of India over a period of time. They’ve shared a specific road map. We, in turn, have told them that we ourselves drawn a road map for indigenisation because we want to drive up value addition, and so in consultation with the industry over the last two years, we have prepared our own roadmap. We have now shared that road map, and told them if they can align their road map, in which case we don’t need to give them any separate concessions,” Sundararajan said.
Last month, the Ministry of Electronics and Information Technology had notified a phased manufacturing programme, one that details a road map for fiscal benefits on production of components, in a periodic manner. The cellular device manufacturing industry has estimated a 39-50 per cent increase in value addition through the government’s phased manufacturing programme, which would look at local production of components in phases of 3, 5, 7, and 10 years. “We also admit that there will be some products, for which we will have to import duty free, because we don’t manufacture them. There’s no dispute on that,” Sundararajan said.
Earlier, Apple had found itself at loggerheads with the government over the local sourcing norm for single-brand retail trading, when the company wanted to set up its own retail stores in India. The norms stipulate that at least 30 per cent of the goods sold at single-brand retail stores must be sourced domestically. Industry analysts suggest this is what could possibly have prompted Apple to set up, and now look at expanding, local manufacturing capacity.
On Monday, Tesla CEO Elon Musk also ruled out the launch of the firm’s cars in India in the next few years, considering that the supply does not exist in India for the firm to support the 30 per cent local sourcing norms.
The government on Tuesday clarified that Tesla will not have to source local components if it plans to up a manufacturing unit in India.