Govt asks Apple to manufacture, export more from India

Apple and Samsung are international players and should work as a team with domestic companies to transform India into a global powerhouse: IT Minister Ravi Shankar Prasad.

The government on Monday exhorted iPhone maker Apple to expand manufacturing base in India, and use the country as export hub, as it promised to line up fresh incentives and sops to galvanise electronics as well as phone industry in coming 2-3 months.

Apple's manufacturing investment so far is only the "tip of the iceberg", IT Minister Ravi Shankar Prasad said, adding the government wants global giants like Apple and Samsung to have a "robust presence" here.

"India will offer you Human Resource, investor-friendly policies, and incentives for making in India, and for exports," the minister said after holding a CEOs roundtable with over 50 electronics and phone companies.

Apple and Samsung are international players and should work as a team with domestic companies to transform India into a global powerhouse, he said, adding he did not foresee any conflict of interest between the two sides.

"Apple has started manufacturing iPhones in India... making components and are exporting as well...Apple is on board as far as India's success story is concerned," Prasad said.

Apple, which works with Taiwanese contract manufacturer Wistron in India, currently makes iPhone 6S and 7 here.

Sources said Apple is looking at assembling more models in the country, although there has been no official word from the company on the same.

The minister's day-long brainstorming session with CEOs comes at a time when India is trying to pitch itself as an international hub for electronics, and grab opportunities that have cropped-up in the backdrop of rising trade tensions between the US and China, a global manufacturing destination.

India is looking to galvanise smartphone and component manufacturing and position itself as a global hub, dishing out incentives to sweeten the deal for international brands. It also wants to attract supply chain and ancillary firms, and increase value addition.

Prasad said the government will roll out, in the next 2-3 months, a complete roadmap including incentives and sops that will act as catalyst for companies to deepen their manufacturing and export commitments.

Niti Aayog will bring out a plan soon in this regard in consultation with the IT Ministry, he added.

The plan to incentivise manufacturing will entail various aspects including sops by states as well as favourable policies related to land and energy.

Prasad also asserted that India must become a hub for 5G, and that such an ecosystem needs to be backed by Intellectual property (IP), patents and Research and Development.

India is also open to companies that want to leverage it purely for exports, he said.

Earlier in the day, the minster asked captains of electronics and mobile industry to step up investments as well as manufacturing in India and asserted that fundamentals of the economy remain strong despite global turbulence.

Addressing heads of leading electronics and mobile companies like Apple, Dell, Oppo and Samsung, Prasad had made an aggressive pitch, urging players to look at India "with greater vigour, and more commitment".

India has set its sight on creating a $ 400 billion (around Rs 28.43 lakh crore) electronic manufacturing ecosystem by 2025, and notified a new policy to boost manufacturing activities.

Prasad also instructed the ministry to set up an institutionalised mechanism in form of a taskforce that would regularly interact with the industry, take their suggestions and address concerns.

The closed-door meeting included representatives from all major verticals of electronics sector such as mobile handsets, consumer electronics, strategic electronics, medical devices, electronics manufacturing services, components, telecom and LED lighting, among others.

Big names in the electronics and manufacturing industry including Vivo, Oppo, Qualcomm, Xiaomi, Dell, HP, Bosch, Cisco, Flextronics, Foxconn, Nokia, LG, Panasonic, Intel, Wistron, and Sterlite Technologies attended the meeting.

The minister said the players discussed various challenges pertaining to single window clearance, component manufacturing, among others.

Over the last few years, there has been a visible ramp up of smartphone production in India, as new mobile factories mushroomed across the country to cater to data-hungry smartphone users.

Steps taken by the government in the past years to promote electronics manufacturing include Modified Special Incentive Package Scheme, phased manufacturing programme, electronics manufacturing clusters and electronics development Fund.

The National Electronics Policy 2019 - cleared by the Cabinet earlier this year - plans to bolster mobile manufacturing in the country to 1 billion units worth $ 190 billion (about Rs 13 lakh crore) by 2025, of which 600 million units worth $ 110 billion (about Rs 7 lakh crore) will be exported.

The government had recently relaxed FDI norms for single-brand retail, offering players like Apple more flexibility on local sourcing norms.

It also did away a provision that required companies to mandatorily set up a brick-and-mortar store before getting into online retail trading.

MAIT (Manufacturers Association of Information Technology) President Nitin Kunkolienker said during the discussion, the industry body highlighted the need for creation of a component manufacturing hub in India that needs to be promoted aggressively by incentivisation by the government.

The recommendations include offering production-linked export incentive, leveraging India's geo-political influence and FTA influence with countries to accept BIS and TEC standards as sufficient to access their markets.

Photograph: Ally Song/Reuters