Apple seeks changes in phased manufacturing programme for setting up unit in India

New Delhi: iPhone maker Apple has sought modifications in the government's phased manufacturing programme (PMP) as it plans to set up a manufacturing unit in the country.

The objective of Electronics and IT ministry's PMP is to boost indigenous production of mobile phones by providing tax relief and other incentives on components and accessories used for the devices. The programme will be rolled out 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 said.

The official added that DeitY is discussing the matter component-wise with the Cupertino-based technology major.

Under the PMP, benefits are extended to parts and sub- parts as the manufacturing ecosystem evolves. It also aims at increasing the domestic value addition for setting up a robust manufacturing ecosystem in India.

An e-mail query to Apple went unanswered.

Earlier this month, Apple Inc has indicated to the government that it is ready with a blueprint to begin manufacturing iPhones in India, but wants fiscal concessions, including Customs duty waiver on import of components.

Apple executives had made a detailed presentation on its road map for setting up a manufacturing unit in India to an inter-ministerial group headed by Department of Industrial Policy and Promotion Secretary Ramesh Abhishek.

With sales tapering off in the US and China, Apple is eyeing India -- the fastest growing smartphone market in the world -- and looking to set up a local manufacturing unit to cut costs.

It, however, does not manufacture devices on its own and rather does it through contract manufacturers. Besides exemption from the Customs duty on imports of components and equipment for 15 years, Apple wants relaxation in the mandated 30 per cent local sourcing of components.

The company sells its products through Apple-owned retail stores in countries like China, Germany, the US, the UK and France, among others. It has no wholly-owned store in India and sells its products through distributors such as Redington and Ingram Micro.