To push forward its Make in India initiative, the Centre is looking to offer some policy incentives to Apple and other electronic manufacturers to manufacture and export their products from India, according to an Economic Times report.
The Ministry of Commerce is in discussion with the company regarding some sops it is seeking for its component manufacturers. Apple is seeking income tax benefits and a five-year tax break under the Merchandise Exports from India Scheme (MEIS). The Ministry of Electronics & IT (MeitY) is being consulted for these propositions, government sources said to Moneycontrol.
Companies get duty benefits of 2-4 percent under MEIS, depending on their product and the country to which it is being exported. The government wishes to encourage electronic exports from India, which is why it is hoping to extend benefits to all companies instead of offering sops to Apple alone, the report said.
The government has assured Apple that it would provide this benefit indefinitely, but the US-based technology giant is insistent on getting a commitment of five years, the source said. The Department of Revenue is worried that giving select companies specific export incentives may put India in conflict with the World Trade Organisation. Wistron, a Bengaluru-based company, is contracted by the iPhone maker at present to manufacture its old models for the Indian market.
At the World Economic Forum in Davos later this month, Commerce Minister Suresh Prabhu is expected to meet executives from Apple to discuss their India manufacturing plans.
Apple had submitted an application to the Department of Industrial Policy & Promotion asking for a full exemption from duties on manufacturing and repair units, yield loss on parts and consumables for smartphone manufacturing, and services for 15 years applicable to both domestic and export markets. The government had told the company it would get no special concessions.