Apple Should Consider New Phased Manufacturing Programme, Says Government

The government wants iPhone maker Apple to consider a new manufacturing scheme offering duty benefits to set up its plants in the country.

"Apple had asked for a set of concessions. For a period of 15 years all the components that Apple imports, they want them to be free of duty. We have a phased manufacturing programme (PMP) because we want more and more value addition to come to the country. We want them to understand how this PMP will work and how they can dove tail into that," Ministry of Electronics and IT Secretary Aruna Sundararajan told reporters on Saturday.

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She was speaking on the sidelines of the annual session of the Confederation of Indian Industry (CII). IT and Law Minister Ravi Shankar Prasad has approved PMP and the government set to notify it.

"Right now the value addition is minimal. We want to take it up. For that purpose we have just announced phased manufacturing programme for mobile phones," Sundararajan said.

According to Indian Cellular Association, the PMP is expected to increase local value addition in mobile phone manufacturing to increase to 39-50 percent in next 3 years.

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Under PMP, the government has already imposed additional duty on import of mobile charger, battery pack and wired headset in 2016-17.

In 2017-18, key components like mobile microphone and receiver, USB Cable, key pads will attract duty benefits.

Components like camera module, mobile antenna etc will be given incentives or duty benefit in 2018-19 if procured locally by handset makers.

Mobile phone makers will get benefit of tax or incentives on the touch panels, mobile screen, vibrator motor or ringer from 2019-20 onwards under the programme.

The phased manufacturing programme was proposed by a joint panel of the industry and the government - Fast Track Task Force. The panel set up under the MeitY has set target of 500 million handset production by 2019 and export target of 120 million mobile phones by 2019-20, taking annual manufacturing output in the range of Rs. 1.5-3 lakh crores.

In 2016-17, total value of mobile phone to be produced in India is likely to reach Rs. 90,000 crores from Rs. 54,000 crores in 2015-16.