Apple seeks changes in PMP for setting up unit in India

The Dollar Business Bureau 

American tech giant Apple Inc has sought changes in the phased manufacturing programme (PMP) of the government as the iPhone maker plans to establish a manufacturing unit in India.

The Ministry of Electronics and IT came out with the PMP with the objective to boost indigenous manufacturing of mobile phones by offering tax sops and other incentives on accessories and components used in the devices. This programme will be implemented over a period of time.

“The department of electronics and information technology (DeitY) is looking at this. They want alignment of duty structures on the mobile components which it proposes to make here. In the current PMP, Apple's plan is not fitting,” an official told to PTI.

DeitY is having discussions over the matter on components with the iPhone maker, the official added.

Under the phased manufacturing programme, benefits are provided on components and sub-components as the manufacturing ecosystem grows. It also focussed at increasing the local value addition for establishing a strong manufacturing ecosystem in the country.

The Cupertino-based tech major, earlier this month, has indicated to the Indian government that the blueprint was ready for it to begin the manufacture of iPhones in India, and is waiting for financial concessions, including waiver of customs duty on the import of components.

The company’s executives had also given a detailed presentation to the inter-ministerial group chaired by Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek for establishing the manufacturing plant.

With sales of iPhone narrowing down in America and China, Apple is looking at India - the world’s fastest growing market for smartphone - and planning to set up a domestic manufacturing unit to reduce costs.

However, the company does not manufacture devices on its own but sources them through contract manufacturing firms. Besides seeking exemption from customs duty for 15 years, Apple Inc also seeks relaxation in the mandatory rule of sourcing 30% components from the domestic market.

Apple sells its devices through its fully-owned stores in countries such as the US, China, Germany, France and the UK, among others. However, it has no fully-owned retail store in India and has to sell its products via distributors such as Ingram Micro and Redington.