Two Apple suppliers in India have been selected to receive manufacturing incentives, which are likely to be used for iPad production in the country. The scheme is known as a production-linked incentive (PLI) plan.
Foxconn and Wistron were among the companies to qualify for cash-back deals in return for boosting their manufacturing operations in the country …
Background
We previously explained the background leading up to the award.
Apple first sought financial incentives to assemble iPhones in India back in 2016. The government said no to most of Apple’s requests, but the company went ahead with local production plans anyway, starting with the original iPhone SE.
The iPhone maker did eventually get one of the tax concessions it had sought: the ability to import iPhone components into the country without paying any import taxes on them.
Apple continued to seek incentives for increasing the proportion of iPhones made in India, and the government last year announced a scheme designed to reward smartphone manufacturers for boosting production volumes. These incentives were worth between 4% and 6% of the value of phones, depending on volumes.
This new PLI scheme was approved for tablets and laptops back in February.
Apple suppliers in India among PLI beneficiaries
Reuters reports that the Indian government has now announced the list of companies who qualify for the latest PLI scheme, and this includes both Foxconn and Wistron, alongside Dell and others.
India on Thursday named Dell Inc, Wistron Corp and Foxconn as its choice of global companies in a $1 billion incentive plan to produce and boost exports of laptops, tablets and personal computers.
Ten Indian companies were also selected, including smartphone maker Lava and Dixon, which makes TVs for Xiaomi Corp (1810.HK) in India, the government said in a statement.
Under the plan, manufacturers get cash-backs of 1% to 4% of additional sales of locally made goods over four years, with 2019-2020 as the base year.
Apple has long been working on reducing its dependence on China by expanding product assembly to a growing number of countries, with India heading the list. A range of iPhones are made in the country, and this latest incentive is expected to prompt the company to commission iPad assembly in India, too.
iPhone production in India was disrupted for three months following a riot by underpaid workers, while on a happier note Mac sales tripled after Apple opened an official online store in the country.
Photo: Andres Jasso/Unsplash
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