Inter-ministerial group to discuss Apple's demand next month

A group of senior officials from ministries, including commerce and finance, will early next month deliberate on the incentives sought by US-based iPhone maker Apple to set up a manufacturing unit in the country.

Officials from departments of commerce, industrial policy and promotion (DIPP), revenue, environment and forest, electronics and information technology (DeITY) will attend the meeting.

The group is likely to meet in the first week of January to discuss the issue, sources said. In a communication to the government, the Cupertino-based technology major has asked for several tax and other incentives to enter India in the manufacturing sector.

However, government sources said the technology-major should set up the manufacturing unit in India without seeking additional support.

"Several companies in India are manufacturing mobile phones in India. Nobody is asking for additional incentives. Currently, the government provides sufficient support to boost electronic manufacturing," they added.

The government provides benefits under Modified Special Incentive Package Scheme (MSIPS) to boost electronic manufacturing in the country.

The scheme provides financial incentives to offset disability and attract investments in the electronics hardware segment. It also gives subsidy for investments in Special Economic Zones, among other benefits.

Currently, Apple's products are manufactured in six countries, including Korea, Japan and the US.

Earlier, the finance ministry in May had rejected relaxing the 30% domestic sourcing norms, as sought by the iPhone and iPad maker as a pre-condition for bringing in FDI to set up single-brand retail stores in the country.

The company had sought exemption on the ground that it makes state-of-the-art and cutting-edge technology products for which local sourcing is not possible. The government had also turned down the firm's proposal to import refurbished phones and sell them in India.

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.

The government has announced incentives to promote electronic manufacturing in India and reduce the import bill.

Total import of electronics goods were valued at Rs 2.25 lakh crore in 2014-15 as against Rs 1.95 lakh crore in the previous year.