Apple should cross obstacles to make iPhone in India
Early of this year, Indian ministers have announced that Apple is looking to launch the manufacturing unit in the Bangalore, which is known to be Silicon Valley of India.
This announcement made people in India and Government ministers feel proud as country is growing its manufacturing chain by giving competition to the neighbouring country china which is known for experts in manufacturing industry. There are many predictions that most premium makers of smart phones are looking to start their units in India and making country as manufacturing base.
Apple has demanded 15 years exemption on the countervailing duty (CVD) which is implemented on the imported components. This will be very difficult for the government to accept their demand as government is planning to start GST (Goods and Services Tax) this year.
In the mean time there was news from the Revenue Secretary Hasmukh Adhia, that there not giving any individual exemptions under the GST authority.
This announcement will be mostly effect the smart phone makers as this duty is levied on the electronic components imported in to the country. According to the WTO Information Technology Agreement, components that are used in mobile phones have been exempted from this kind levy for past 7 years till last year.
Under the Make in India initiative the government extended few things in agreement to give support to the local manufacturing units. At that point of time there is no announcement that Apple would be looking to launch their manufacturing unit in India. Now government is looking to take step back by levying tax on goods which will be problem for the local manufacturers.
Other than Apple there are many china based phone manufactures looking to launch their plants in India as the components and labour cost have been increased to an extent in china. This made the many manufacturing companies look at the neighbouring countries to launch their plants.
Even though the government took a step forward to accept the CVD exemption on the apple imported goods the real issue is that there is no guarantee that they are willing to set up a shop here or not.
The government on overnight can’t take any decisions on this matter, so they currently appointed a council to study about this and decide on which goods they can give redemption. Once the government signed on the exemption of CVD on specific goods, it will be included for all the small and medium manufactures in the country which will be helping the entire sector to develop. So the government is discussing with various state ministers regarding this issue. Not only the Apple, mobile application development companies India who develop Iphone apps are also looking to our country regarding the decision by our government.
There is one strategy government could play as electronic manufactures receive benefits under the modified incentive package scheme (MSIPS)
that was implemented years ago to attract foreign investment in the electronics sector. According to this scheme the manufactures will get capital subsidy and reimbursements for things like CVD. There is also talk like central government may consider Apple as exceptional case and accepts all the demands.
If you are looking to develop a Iphone application for your business, please reach us at info@fugenx.com and www.fugenx.com. FuGenX Technologies is one of the leading mobile application development company India who delivers you the user free mobile applications.
