India opens up opportunities for manufacturing to draw Apple

India is planning to encourage localization of tablet and laptop production by attracting such companies as Apple Inc. and Dell Technologies Inc. The country is ready to compete with China to become a manufacturing hub. 

The federal technology ministry has submitted an upgraded incentive program for manufacturers. Electronics industry executives will participate to discuss it. According to the program, the incentives could exceed half a billion dollars per company. India strives to increase investments in tablet and laptop manufacturing to cut imports and boost exports in the long term. 

India is taking actions to make such companies as Apple, Dell, HP Inc. and Asustek Computer Inc. enter the Indian manufacturing space or expand the production, the sources said. In particular, the country wants to draw attention of Apple, so that the company moves iPad production to India. It is worth noting that iPhone is already being made in India by its Taiwanese suppliers. 

According to a government document seen by Bloomberg News, the incentive program includes payments of up to 45 billion rupees ($549 million) per manufacturer. To qualify for the program, foreign companies would need to invest 7 billion rupees in India over five years on top of the investments they attracted into the country before March 2021. Subsidies will depend on how much manufacturers would spend on components inside the country, they can amount to 6% of the sales of finished products.

The program could change after the industry representatives discuss the above mentioned measures. Last year, India allocated 73.5 billion rupees to encourage local manufacturing and boost exports of IT products such as laptops, tablets, and PCs. However, the officials failed to do it due to insufficient size of the incentives. 

The government may attract U.S. companies not only with the incentives. The Indian market of IT products may also generate interest among them. According to research firm Canalys, the market grew 12% last quarter, even as global demand for electronics slowed.