Apple is lobbying for incentive by bringing iPad tablet manufacturing to India by participating in a new scheme to boost India’s exports of computer products.
India launched a $6.7 billion plan to boost smartphone exports last year, as Prime Minister Narendra Modi stepped up efforts to promote electronics manufacturing and create jobs.

Apple, which has raised production of iPhones in India to cut its dependence on Chinese manufacturing, took part in that scheme via its contract manufacturers.

Now the government is preparing to unveil another incentive to drive local manufacturing of IT products including tablets, laptops and servers, Reuters reported.

The new performance-linked incentive (PLI) scheme, which offers cash-back to manufacturers for exports, will have a budget of up to 70 billion rupees ($964.5 million) over five years. It’s expected to be launched by the end of February.

Apple, along with others, is lobbying for a bigger budgetary outlay of 200 billion rupees before that plan is finalized, as India doesn’t yet have the scale or the supply chain for making IT products and competes with duty-free imports of tech products, two of the sources said.

Apple’s push comes at a time its iPhone supplier Wistron is restarting operations at a southern Indian plant after angry workers went on a rampage last year. Apple is yet to take the Taiwan manufacturer off of probation.

India is also planning another PLI, at a budget of 50 billion rupees over five years, to boost domestic manufacturing of wearable devices such as smartwatches, the sources said, adding the plan could be announced within two months.

Apple assembles a bulk of its iPads in China, but is diversifying production to markets such as India and Vietnam to minimize the impact of the U.S.-China trade war and the coronavirus crisis.

Its top supplier Foxconn is building assembly lines for iPads and MacBook laptops in Vietnam, Reuters reported late last year. Other iPad assemblers include Taiwan’s Compal Electronics and China’s BYD Electronic International.

In India, Apple will likely have iPad’s assembled by one of its existing suppliers in the country as early as this year, two of the sources said, though its plans could get delayed as India makes the entry of BYD difficult amid its wariness to give new tech business to Chinese companies.

“The government is asking Apple to get iPads assembled by its contract manufacturers here, the non-Chinese companies” one of the sources, a government official said.

It was not clear which of Apple’s three contractors in India – Foxconn, Wistron and Pegatron – would assemble iPads.

Cupertino, California-based Apple began the assembly of iPhones in India in 2017 and has since ramped up manufacturing operations via the local units of Foxconn and Wistron. Pegatron also set up a base in India last year.

Foxconn will invest up to $1 billion to expand a factory in southern India where the Taiwanese contract manufacturer assembles iPhones, Reuters reported previously.

The three Apple suppliers have also committed roughly $900 million over five years to make iPhones in India.