PLI or no PLI, mobile phones in India and laptops in Vietnam, says Apple

Apple will not apply for the production-linked incentive scheme for laptops. The Ministry of Electronics and IT recently notified the 2.0 version of the scheme, slating a budgetary outlay of ₹17,000 crore, with the hope of convincing global companies such as Apple, Dell and Samsung to shift their IT hardware production to India.

However, sources close to the matter told businessline that Apple would skip the subsidy scheme for laptops and computer hardware, and solely focus on using subsidies provided by the Centre to localise mobile and mobile accessories manufacturing in the country.

The Government notified the PLI scheme for IT hardware 2.0 on Tuesday, after it was held up for more than two years. The government had to initially scrap the scheme in 2021, after it received no bids from global giants, who had issues with the investment requirements of the scheme.

While reintroducing the PLI, the government has made modifications to the scheme, including doubling the budgeted outlay to Rs 17,000 crore or almost $2 billion, as well as reducing investment requirements for certain categories of global companies,

However, despite these changes, it remains to be seen whether global laptop makers will participate in the scheme. Global laptop makers that businessline has spoken to said that they are still evaluating the scheme notified only two days ago.

Sources also told businessline that Apple would not participate in the scheme, and never had plans to do so. Sources added that MeitY is aware of this. This comes at a time when the Government of India is betting heavily on global giants like Apple to make the PLI of IT hardware success.

On the eve of the launch of the scheme, Rajeev Chandrasekhar, minister of state for technology told Bloomberg that global giants like Apple and Samsung are interested in increasing electronics production in India.

But for now, it appears that Apple is solely focusing on localising production for iPhones and Apple accessories. Apple’s contract manufacturers have benefitted significantly from MeitY’s PLI for smartphones, where they have received thousands of crores in subsidies aiming to localise a significant portion of their supply chain to the country.

The same will not apply to MacBooks because the Cupertino-based tech company is looking to diversify the production of MacBooks to Vietnam instead. People aware of Apple’s supply chain strategy have always maintained that Apple was diversifying the production of laptops to Vietnam and mobile phones to India.

Apple will start making MacBooks in Vietnam by mid-2023. According to expert opinion, Vietnam is well placed to snap up supply chain shifts from China for laptop manufacturing by 2030. It is predicted that over half the world’s laptops will be manufactured in Vietnam and Thailand. Moreover, the India-Vietnam free trade agreement allows laptops assembled in Vietnam to be sold in India without customs duties. The Hindu BusinessLine