iPad production in India a step closer as incentives approved

The possibility of iPad production in India got a step closer today, as the government approved a proposal to offer a billion dollars’ worth of incentives. The production-linked incentive (PLI) plan is specifically aimed at manufacturing tablets and computing equipment.

A previous report said that Apple was interested in using the incentives to begin iPad assembly there…

Background

We previously reported the background to the PLI scheme, and the reason for Apple’s interest in making iPads in the country.

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.

Apple has long been working on reducing its dependence on China as a manufacturing hub, a report a few months ago saying that iPad production could expand to Vietnam this year. A separate report last month stated that a “significant” amount of iPad production would be leaving China.

iPad production in India under discussion

Reuters reports that the PLI scheme has been approved.

 India on Wednesday approved a 73.5 billion rupee ($1.02 billion) plan to boost local manufacturing and exports of IT products such as laptops, tablets, personal computers and servers, the technology minister said […]

It provides manufacturers cash-backs of between 1% and 4% of additional sales of locally made goods over four years, with 2019-2020 as the base year […]

The PLI plan is also likely to help U.S. tech giant Apple Inc assemble some of its iPad tablets in India, Reuters previously reported.

Although Apple is keen to expand iPad production beyond China, and the incentives would help Apple set up an assembly operation in the country (via one of its manufacturing partners), it’s not clear whether they will prove enough.

Apple reportedly wants the value of the scheme to be almost tripled, to 200 billion rupees. It argues this is necessary because India doesn’t yet have the kind of supply chain needed for iPad production, so most of the components would need to be imported from China.

It’s likely that the Cupertino company is continuing to negotiate with the Indian government even after this announcement.

Photo by Roberto Nickson from Pexels