The commerce and industry ministry is awaiting a concrete proposal from iPhone maker Apple to set up manufacturing unit in India, Union minister Suresh Prabhu said on Monday. “We are waiting for a good proposal from Apple. Please give us a concrete proposal. If the proposal comes, we will examine it. We are always open for that,” Prabhu told reporters here.
During a recent meeting with Apple officials, the minister has asked them for a proposal. Nick Amman, director, government affairs, and Priya Balasubramaniam, global vice-president (operations), Apple Inc met the minister last Friday.
The Cupertino-based iPad manufacturer Apple has asked for certain concessions for setting up manufacturing unit in the country. The government had sought investment and job creation details from the iPhone maker to facilitate setting up its manufacturing facility in India.
In March, the then commerce and industry minister Nirmala Sitharaman had informed the Rajya Sabha that the government has not accepted most of the demands of the company. Apple India had sought concessions, including duty exemption on manufacturing and repair units, components, capital equipment and consumables for smartphone manufacturing and service/repair for a period of 15 years.
The company also wants relaxation in the mandated 30 per cent local sourcing of components, besides reduction in customs duties on completely-knocked-down and semi-knocked- down units of devices that are to be assembled in the country.
Apple does not manufacture devices on its own but gets the job done through contract manufacturers. It sells its products through company-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.
Meanwhile, the commerce and industry ministry is mulling incentives for states, which play a proactive role in promoting exports, as it will help boost economic growth, Prabhu said. He said he has sought the views of states on the issue, which was raised during the third meeting of council for trade development and promotion.
“We are thinking of ideas whereby we can incentivise the states, which promote exports. I have mooted this idea before the states and asked them to give their ideas on this,” Prabhu said.
Trade contributes significantly in boosting the country’s economic growth, the commerce and industry minister said.
If the gross domestic product (GDP) of states rises, it would push the country’s growth, he said, adding that the focus should also be on the districts’ GDP, which in turn would fuel the nation's economy.
Prabhu said the ministry is in the process of preparing a strategy to promote overall exports and push the country’s industrial growth. When asked about the concerns raised by exporters in the meeting related to GST (goods and services tax) refund, he said the issue was discussed and the ministry is working on an ‘e-wallet’ system to resolve the matter.
Before the implementation of GST last July, exporters used to get ab-initio exemptions from duties. But now they have to pay first and then seek refund. Due to this process, the Fieo has stated that about Rs 1,85,000 crore will get stuck with the government.
Under the proposed system, according to the Federation of Indian Export Organisations (Fieo), the problem of liquidity will be solved as exporters may use it like a running account where money will be debited from e-wallet when duty paid supplies have to be undertaken and the amount will credited when the proof of exports is made available.
The other issues that came up for discussion during the council’s meeting include role of foreign direct investment (FDI) in promoting exports and enhancing role of states to push shipments.
During the meeting, Prabhu said, Goa chief minister Manohar Parrikar suggested that all states prepare their export policies. So far, only 14 states including Gujarat, Tamil Nadu, Tripura and Jammu and Kashmir have done that. Fieo president Ganesh Kumar Gupta suggested exemption from electricity duty under the GST regime and transport subsidy to increase competitiveness.
The council was constituted on July 3, 2015, to ensure a continuous dialogue with states and Union Territories on measures for providing an international trade enabling environment, the commerce ministry said in a statement.
Members of the council also deliberated on creating a framework for making the states active partners in boosting exports. The state ministers of commerce and industry, secretaries of central departments concerned and heads of other export related organisations are the members of the council.
The country’s merchandise exports during April-November 2017-18 increased by 12.01 per cent to $196.48 billion.