- Apple reportedly in talks with the government to Make in India.
- It will join the list of other companies like Xiaomi, Gionee, Samsung and others.
- But there is a difference between manufacturing and assembling in India.
Make in India and Digital India are Prime Minister Narendra Modi’s most ambitious projects that aim at easy governance, accelerated growth and creation of jobs. In line with this dream, several companies have been pledging to ‘Make in India’. The most recent one is Apple, who has expressed desire to build here (whatever happened to Trump and Make in America) and believed to be in talks with the Indian government. CEO Tim Cook has reportedly written a letter to the government, outlining his plans, and also seeking incentives from the government. Making iPhones in India would mean some drop in the price of the devices sold here, as the company struggles with falling sales and its first ever revenue drop in over a decade. But, Apple isn’t the only one.
Companies gearing for Make in India
Over the past two years, we’ve seen several companies promising to build smartphones in India. Last year in December, Micromax pledged to invest Rs 300 crore for Make in India. Xiaomi, Gionee and Motorola were among the first companies to announce their plans in line with PM Modi’s ambitious project. Soon after, Asus revealed its plans to set up an internal study to understand the prospects of manufacturing in India. While Samsung’s tablet was touted to come with a make in India tag, popular Chinese vendors like OnePlus promised to start building the OnePlus 3T here, while LeEco announced its local manufacturing unit in Greater Noida.
Then there are others like Cisco who has been quite open towards the new initiatives by the government, indicating manufacturing operations in India. It has teamed up with the government of Maharashtra to announce new local projects including turning Nagpur into a smart city.
Do we have the infrastructure?
Let’s get this straight first – these companies will be assembling the devices in India, and not building. We can’t per se manufacture a device in India because we don’t have the infrastructure or ecosystem to do so, yet. ‘Make in India’ and ‘manufacture in India’ are two very different things at the moment. For instance, most of the devices are manufactured in China as the country has a buzzing components industry and cheap labour.
On a positive note, device assembly is a step towards the big dream. This could potentially mean the rise for locally sourced components in order to cut down on the cost of transportation and eventually give a push to building components here. It is important to create conducive conditions to attract manufacturing plants, which can be done by government incentives that will attract OEMs to manufacture here.
Incentives from the government could play a major role
If an ET report is to be believed then handset makers have already begun asking the government for some relief on the duties and levies that are imposed on mobile components made locally in India, just ahead of the Union Budget. Indian Cellular Association (ICA) that represents phone makers like Samsung, Apple, among others, want components made in India like USB cable, keypad, mic, receiver, die-cuts to have lower duty costs. This will help give a push to the local manufacturing of components as it brings down the cost of the device and make local manufacturing more attractive. Meanwhile, ICA as well as Consumer Electronics and Appliances Manufacturers Association have been asking the government to continue differential duty benefits even as GST comes into effect.
Smartphones play a major role in the Make in India initiative as we’ve been the fastest growing smartphone market accounting to 27.5 million devices sold in the second quarter of 2016, which is an increase by 17 percent from the previous quarter as per an IDC report. This makes India a lucrative market for handset makers who would be willing to build in India, provided there is some relaxation in taxes levied and other tax, land and related incentives from the government. After all, wouldn't we love to own a smartphone with 'Make in India' tag.
Last Updated 31, Mar 2018, 6:56 PM IST