Apple To Meet Indian Government Over Factory Plans

Yet another uncomfortable date with girlfriend’s parents? Or will this swing the deal?

Apple’s plans to set up manufacturing in India has been quite a yes-no game over the last couple of years. While talks have ensued and fallen apart numerous times in this period, Apple has been repeatedly showing its interest in the growing market of the country.

It seems things now are finally getting serious.

A team from the U.S. based tech giant is set to meet senior officials from various Indian ministries in January 2015, to discuss their prospects for setting up a manufacturing plant within the country.
Officials from Departments of Commerce, Industrial Policy and Promotion (DIPP), Revenue, Environment and Forest, Electronics and Information Technology (DeITY) will be involved in the process.

Apple has been seeking a few requests for setting up their house in the country. These include relaxed labeling laws, tax concessions, and more. Currently, the law of the country requires that certain product details be printed on the device itself, but Apple has asked that it be allowed to print the information on the iPhone’s packaging or somewhere in iOS.

“Apple wants the government to relax labeling rules so that it doesn’t have to print product-related information directly onto devices to avoid cluttering up their minimalist design. That’s one of the concessions Apple has sought after expressing its intention to start manufacturing in India”, an official reportedly said.

While this request is still making the rounds of the concerned ministries — those being the Department of Industrial Policy and Promotion, the Department of Revenue and Department of Electronics and Information Technology — the company has also sought tax incentives for manufacturing in the country. This request is being considered by the Department of Finance.

This is not the first time that Apple and the Government of India have been in a logjam over matters of the kind.
Earlier last year, Apple’s CEO, Tim Cook visited the country and met with the Prime Minister, with regard to setting up Apple Stores in the country.
While Apple products are available for now through third parties like such as Redington and Ingram Micro, the company has been looking to open wholly-owned stores for retail within the country.

The problem that Apple has been facing with this has been an Indian law that mandates that all retail outlets carry at least 30% products manufactured within the country. Since Apple does not yet have a manufacturing unit in the country, that has been a cause for trouble.
They did make a plea with the Department of Finance, seeking relaxation on the grounds of bringing “state-of-the-art” and “cutting-edge technology”, but that didn’t fly too well.

If one were to believe chatter, the vibe for Apple within these departments and ministries of concern is mixed. While a lot do want Apple to come to India — “We will very much like Apple to come and have a base in India”, said Information Technology Minister Ravi Shankar Prasad; there are others who are not too keen on Apple’s demands and want for it to be treated equally with others.

The latter opinion probably stems from the fact that as many as 42 companies are making mobile phones in India, including Chinese firm Huawei and Xiaomi, and no firm has approached the government for any additional incentives.
“We have not done this for anyone”, said a senior government official whose department is one of several involved in evaluating Apple’s proposals, to Reuters. “If we do this, we must see a lot of value addition”.

Truth be told, there are things in this deal that are of importance to both the parties. While for Apple this would be an entry window into the largest and the fastest growing cellular market in the world, for the Government of India it would be a chance to show that they are serious about having big international brands in their homeland.

A successful outcome could go a long way in showing the global market that India is serious about opening up the country to foreign investments.

In addition to this, letting Apple come to India for manufacturing would be a boost to the Make In India campaign of development and initiative that has been undertaken by the Prime Minister (which underlines Modi’s ambition to make India a global manufacturing hub), in order to drive the economy and create jobs for millions of people entering the workforce each year.

However, that and other such decisions will not be easy.

The meeting is scheduled for the 25th of January for now, and we shall keep watch for any word that gets out. From the looks of it, it could go either way.

Originally published at Chip-Monks.