Apple lobbies for India incentives as it plans iPad assembly -sources

Byd Electronic (International)

18/02/2021 08:04

By Sankalp Phartiyal
    NEW DELHI, Feb 18 (Reuters) - Apple Inc  AAPL.O  is angling
to participate in a new scheme to boost India's exports of
computer products, part of what government and industry sources
say are plans to bring iPad tablet manufacturing to the South
Asian country.
    India launched a $6.7 billion plan to boost smartphone
exports last year, as Prime Minister Narendra Modi stepped up
efforts to promote electronics manufacturing and create jobs. 
    Apple, which has steadily raised production of iPhones in
India to lessen its dependence on Chinese manufacturing, took
part in that scheme via its contract manufacturers.
    Now the government is preparing to unveil another incentive
to drive local manufacturing of IT products including tablets,
laptops and servers, three sources closely involved in the
drafting of the plan told Reuters.
    The new performance-linked incentive (PLI) scheme, which
offers cash-back to manufacturers for exports, will have a
budget of up to 70 billion rupees ($964.5 million) over five
years, the sources said. It's expected to be launched by the end
of February.
    Apple, along with others, is lobbying for a bigger budgetary
outlay of 200 billion rupees before that plan is finalised, as
India doesn't yet have the scale or the supply chain for making
IT products and competes with duty-free imports of tech
products, two of the sources said.
    Apple's push comes at a time its iPhone supplier Wistron
 3231.TW  is just restarting operations at a southern Indian
plant after angry workers went on a rampage last year. Apple is
yet to take the Taiwan manufacturer off of probation.
    Apple declined to comment for this story.
    New Delhi is also planning another PLI, at a budget of
roughly 50 billion rupees over five years, to boost domestic
manufacturing of wearable devices such as smartwatches, the
sources said, adding the plan could be announced within two
months.
    All the sources declined to be named as the plans are not
public.
    
    INDIA-MADE IPAD
    Apple assembles a bulk of its iPads in China, but is fast
diversifying production to markets such as India and Vietnam to
minimise the impact of the U.S.-China trade war and the
coronavirus crisis.
    Its top supplier Foxconn is building assembly lines for
iPads and MacBook laptops in Vietnam, Reuters reported late last
year. urn:newsml:reuters.com:*:nL1N2IC0JA Other iPad assemblers include Taiwan's Compal
Electronics  2324.TW  and China's BYD Electronic International
 0285.HK .
    In India, Apple will likely have iPad's assembled by one of
its existing suppliers in the country as early as this year, two
of the sources said, though its plans could get delayed as India
makes the entry of BYD difficult amid its wariness to give new
tech business to Chinese companies.
    "The government is asking Apple to get iPads assembled by
its contract manufacturers here, the non-Chinese companies" one
of the sources, a government official said.
    It was not immediately clear which of Apple's three
contractors in India - Foxconn, Wistron and Pegatron  4938.TW  -
would assemble iPads.
    Pegatron and Wistron did not respond to requests for comment
while Foxconn said it does not comment on specific operations or
work for a customer.
    India's IT ministry also did not respond to a request for
comment.
    India last year banned more than 200 Chinese-origin mobile
applications, saying they threatened the security of the
country. It also announced new controls on telecoms gear
purchases.  urn:newsml:reuters.com:*:nL1N2IA0WJ  urn:newsml:reuters.com:*:nL4N2IW2IO
    Cupertino, California-based Apple began the assembly of
iPhones in India in 2017 and has since ramped up manufacturing
operations via the local units of Foxconn and Wistron. Pegatron
also set up a base in India last year.
    Foxconn will invest up to $1 billion to expand a factory in
southern India where the Taiwanese contract manufacturer
assembles iPhones, Reuters reported previously.  urn:newsml:reuters.com:*:nL4N2EH301
    The three Apple suppliers have also committed roughly $900
million over five years to make iPhones in India.  urn:newsml:reuters.com:*:nL4N2GX2YA
    
($1 = 72.5800 Indian rupees)

 (Editing by Jonathan Weber and Jacqueline Wong)
 ((sankalp.phartiyal@thomsonreuters.com; +91-11-49548064;))