Prime Minister Narendra Modi announced the ‘Make in India’ initiative in September 2014. Since then, many global companies have invested and set up manufacturing and assembly facilities in India. However, nothing has captured attention like the news that Apple might manufacture its iPhones in India.
There have been talks all the way up to the top. Apple CEO Tim Cook met Modi in May 2016. Since then, officials from Apple and its key suppliers have probably met government officials at all levels – in the ministry of finance and commerce for instance.
There was news that Apple may indeed start manufacturing the iPhone in the first half of this year from a supplier facility near Bengaluru. However, the supplier has kept mum for the most part and termed the news speculative.
Apple seems to have a list of demands. These are mainly in the areas of relaxed sourcing norms and tax concessions. It is also seeking predictability in tax rates and other duties. This is so it doesn’t have to face nasty surprises after it has put in billions of dollars in investment. It doesn’t want to be hit with sudden higher tax bills, just because a politician changed or an IT officer interpreted things differently.
While one is not sure if it is true, some news reports also suggest Apple might want one-off, special, Apple-specific concessions, so it makes financial sense for Apple to move its manufacturing here from say China.
All this will take its own time, as the case churns through our government and bureaucratic machinery. One can also imagine the political resistance to giving concessions to Apple. After all, why are we cutting special deals for a rich, multinational corporation that makes expensive phones?
It may lead to socialist propaganda, on how this government only cares about the rich. The suit-boot sarkar memes will appear all over again.
However, the thing for us to note is this – it is imperative we as a nation get Apple to manufacture in India. It helps India a lot more than people might think. And if cutting taxes or giving them concessions is a way to bring them in fast, so be it.
The reason for this is that even by multinational standards, Apple and its iPhone is special. Apple currently is the most valuable and profitable firm on the planet. Its market cap and revenues are higher than the GDP of several countries. The iPhone is Apple’s signature device and a unique product in this world. And yet, it is also one of the highest selling phones in the world. Over a billion of the phones have been sold since it launched in 2007.
If we can demonstrate that India is good enough to make iPhones, we show the world we can manufacture any product. After all, if we are good enough for a quality conscious brand like Apple, we are surely good enough for any other company.
At present, the ‘Make in India’ brand is associated with cheap, low quality stuff. Assembling iPhones in India will move us up the quality chain, and enable us to invite multiple companies from around the world.
All these companies setting up bases here means a big boost to our economy and lakhs of new jobs all the way down to the supply chain. While every quality company is welcome and should be wooed by us, Apple is iconic in this respect. We need it, and the government should facilitate its manufacturing to begin here as soon as possible.
Sure, this doesn’t mean we bend over backwards for Apple. Any deal has to be fair to both sides. However, we as citizens should not fall prey to false propaganda that the government supporting Apple means the government doesn’t care about the common people. In fact, one Apple can bring hundreds of companies into the ‘Make in India’ fold, which then can create millions of jobs for the common people.
We Indians have long been wary of private sector businesses. And we always find it particularly hard to trust foreigners. When the two fears combine – as is the case with multinationals – we look at everything with suspicion. However, there is no way India will become world class unless we engage with the world class.
Besides a boost to our domestic economy and jobs, there are other benefits too. On every gleaming white iPhone box shipped, it currently states ‘Made in China’. Imagine if the millions of iPhones sold around the world could carry ‘Made in India’ instead. The free advertising we get for India as a manufacturing base will alone make this worth it.
Of course, as an aside Apple products in India will become cheaper too, and so will products of other companies that set up manufacturing bases here. The Apple opportunity is a big one for our country. I hope we don’t dither on it, and bite it soon.
February 18, 2017 ()