India Keen on Local MacBook Production Could Boost Incentives

According to a report from TOI, the government is planning to strengthen the deal to commence the anticipated manufacturing of MacBooks and iPads in India. Recently, Apple is said to move some AirPods and Beats production to India soon, according to earlier report.

Also, the government wants to increase the amount it spends on the production-linked incentive (PLI) scheme for IT equipment from the current Rs 7,350 crore to about Rs 20,000 crore. The industry hasn’t shown much interest in this plan.

Top IT ministry sources said the government wants Apple’s manufacturing ecosystem to grow rapidly in the country as the company considers a “China plus one” strategy for global product sourcing.

The IT ministry, which is responsible for growing electronics production in the country, has sent a proposal to improve the plan, and the subject is now with the finance ministry and several other ministries, as per reports.

The former proposal, agreed to by the Union Cabinet in February 2021, guaranteed 1-4% incentive support over four years. The new scheme intends to increase this to 5%. Unlike smartphones, which have a 20% import tariff, laptops come under ITA-1, which enables duty-free imports.

Apple has been hesitant to produce other items in India as it strives to balance China, its biggest production base and sales market. Also, the company has trouble because it doesn’t have a strong supplier base in India. This is because it has been hard to move component makers from China to India because of rising tensions between the two countries.

The government believes that persuading Apple, HP, and Dell to source more from India will help the country gain scale and become a “global manufacturing hub.”

According to a report in The Times of India, the article states,

We feel the earlier scheme was not sufficient to meet the disability that companies would have if they manufactured in India. Thus, with an enhanced incentive plan and a larger fund outlay, the new scheme will surely prompt companies to invest and also make in India.

These are big companies that need to service markets across the world. With the eco-system gradually building in India after the PLI schemes, we are confident that an enhanced and friendlier scheme will bear results in the IT hardware.