February 9, 2023
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India’s $550 Million Plan To Compete With China For Apple’s Business

In an effort to compete with China as a production hub, India intends to increase financial incentives for companies who produce tablets and laptops there. Targets include Apple Inc. and Dell Technologies Inc.

According to persons acquainted with the situation, the federal technology ministry has made the revised programme available to executives in the electronics industry for consultation, along with compensation that might total more than half a billion dollars per company. In order to reduce imports and, in the long run, become a hub for exports, India intends to increase production of tablets and laptops.

According to the sources, the initiative is aimed at businesses like Apple, Dell, HP Inc., and Asustek Computer Inc. to expand or start local production. The nation aims to convince Apple, which currently assembles iPhones in India through its Taiwanese suppliers, to produce iPads domestically.

According to a government document obtained by Bloomberg News, the scheme gives up to 45 billion rupees ($549 million) each manufacturer. Foreign companies would need to invest an additional 7 billion rupees in India over the course of five years, on top of the expenditures they have already made as of March 2021, to be eligible. The incentives could be as high as the equivalent of around 6% of the sales of final goods, depending on how locally components are purchased.

Following consultation with the sector, the proposal might be modified. India announced a programme worth 73.5 billion rupees last year to boost domestic production and increase exports of IT items including laptops, tablets, and personal computers, but the effort failed to draw businesses due to a perception that the incentives were too little.

It might not be appealing for businesses like Dell and HP, which already produce laptops in India on a small scale and have spare capacity, to invest more money to increase production. Meanwhile, Chinese producers like Lenovo Group Ltd. may find it challenging to receive the benefits given New Delhi’s chilly relations with Beijing following a Himalayan border conflict between the two countries in 2020.

Picture Courtesy: Google/images are subject to copyright

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