India renewed efforts to attract Mac and iPad suppliers by US$2 billion incentive

As previous efforts failed to attract global PC manufacturers to make their products in India, the South Asian country doubled down on its incentive scheme to entice manufacturers, especially Apple, to help build a local ecosystem in India.

According to the Press Information Bureau of India, India's cabinet approved the second edition of the Production Linked Incentive (PLI) scheme for IT Hardware, providing INR170 billion (US$2.06 billion) incentives to encourage making notebooks, tablets, all-one-one PCs, servers, and ultra-small form factor devices. India expects the scheme to generate incremental production of INR3.35 trillion, incremental investment of INR24.3 billion, and incremental direct employment of 75,000.

An earlier version of the IT hardware PLI scheme has a budget outlay of INR73.5 billion, along with an incentive of 1~4% on incremental net sales over the base year of fiscal 2020 (April 2019 to March 2020) of goods under target segments to eligible companies. The revised version of the scheme, which will run for six years, more than doubles its budget outlay and offers an incentive of 5% on incremental net sales over the base year. Besides, companies will get an additional optional incentive of another 3% if they use India-made and designed components, sub-systems, or inputs, Mint reports.

Regarding Chinese investments, Ashwini Vaishnaw, India's IT and telecom minister, said that Chinese manufacturers would be allowed in accordance with existing regulations. Although India did not explicitly exclude Chinese manufacturers from participating in earlier PLI schemes, such as that for large-scale electronics manufacturing, IT hardware, and automobiles, China-based manufacturers were absent from the applicant lists.

According to Vaishnaw, HP, Dell, Acer, and others already have high volumes market in India, and Apple is a niche, adding that they are also very seriously evaluating. Still, an earlier The Economic Times report, citing sources, said that Apple has no plan to make Macs and iPads in the country. DIGITIMES also reported that except for iPhone manufacturers, Taiwan-based Apple suppliers are looking to Southeast Asian countries, especially Vietnam and Thailand, amid their relocation from China.

Meanwhile, DIGITIMES also quoted unnamed industry sources based in Taiwan saying that they were considering collaborating with Indian counterparts for joint ventures but were cautious about the inexperience of local manufacturers.

Source: Commerce Department of India, May 2023