* India offers tax concessions on mobile component imports
* Concessions subject to condition of raising local value
* Rejects demand for 15 years tax holiday on all components
By Manoj Kumar
NEW DELHI, May 23 India has offered to allow
Apple Inc to import mobile handset components intended
for use in local manufacturing tax free, a top government
official said on Tuesday.
The tax concessions will be subject to the condition of
increasing local value addition over a period of time.
Apple Inc wants to expand its contract manufacturer's
facility in the southern Indian tech hub of Bengaluru, a federal
minister said on Tuesday, as the iPhone maker seeks a bigger
share in one of the world's biggest smartphone markets.
Cupertino, California-based Apple last week started making
iPhone SE at its Taiwanese contract manufacturer Wistron's plant
Apple, which sold over 50 million iPhones in the March
quarter, down 1 percent year-on-year, is looking for new markets
as its sales in China have weakened.
Among a set of tax concessions, Apple had initially sought a
15-years tax holiday for all components that it would import for
setting up a manufacturing facility in India.
A panel of ministries rejected that demand and has offered a
phased programme to increase the share of local production in
the manufacturing, Aruna Sundararajan, Secretary at the Ministry
of Electronics and IT said.
"We have offered them tax exemptions on those components
which could not be manufactured in India," Sundararajan told
Reuters, adding that local manufacturing component would have to
be increased gradually.
Apple has agreed to increase local share in production over
a period of time, but there was a difference between the plans
of the two sides, she said.
Apple was not immediately available for comment.
India wants Apple to raise value addition share in phases of
3,5,7 and 10 years as the local capacity builds up, part of
Prime Minister Narendra Modi's plans to boost manufacturing.
Industry estimates the phased manufacturing programme could
increase local value addition in mobile phones manufacturing to
40-50 percent in the next three years.
Earlier, Ravi Shankar Prasad, the federal minister for
Electronics and IT said government officials were in touch with
Apple and other mobile phone manufacturers about expanding
facilities and setting up new plants.
"It will be a little early to say that India and Apple have
agreed on the common ground," said the official, adding India
was ready to work out a roadmap to encourage manufacturing.
Industry estimates total value of mobile phones produced in
India touched near 900 billion Indian rupees ($13.90 billion)
compared with 540 billion rupees in the previous year.
"We are waiting for Apple to come back," said Sundararajan.
($1 = 64.7400 Indian rupees)
(Additional reporting by Sankalp Phartiyal; Editing by Sherry