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The government of Karnataka is all set to give certain concessions for Wistron, a contract manufacturer for Apple, in order to attract investments worth ₹1,150 crore.
In an interaction with BusinessLine , KJ George, the newly-appointed Minister for Large and Medium Scale Industries, IT and BT, Science and Technology, Government of Karnataka, said that the government is looking at exempting Apple from the 99-year lease-deed rule. “If they are willing to pay market rates, then we will consider,” he said. Companies generally look to lease property for that time period. Apple will not invest directly, but has given the contract to Wistron, which is planning to invest in three phases.
Manufacturing push
The first phase, of which the ₹1,150-crore investments are a part, is to increase its manufacturing push from India. “Apple is not directly investing, and has given the contract to Wistron. Further, it is demanding tax concessions and incentives from the State government,” said State government sources.
Sources in the Karnataka Ministry said, while Apple has started some manufacturing in the State, it is testing the waters and wants to see if the State has a robust manufacturing ecosystem, and look at exports. “They are eyeing the kind of concessions they can get before firming up additional investment plans, and have come up with a long wish-list,” the official said. While this included land for lease, he did not elaborate on the other things in the wish-list.
Wistron has set up a manufacturing facility at Narasapura industrial area in Kolar with a proposed investment of ₹700 crore. Currently, Wistron assembles affordable iPhone models like the iPhone SE, iPhone 6 and the iPhone 6S out of a rented facility. Wistron, also manufactures out of Peenya, another industrial suburb in Bengaluru.
Apple has had a running battle with the Indian government and has been trying to convince them for concessions, which include exemptions from compulsory 30 per cent domestic-sourcing norms and reduction in tax rates.
The company, which reached a market capitalisation of $1 trillion a few days back, is struggling to better its iPhone sales in India, wherein it sees strong competition from Samsung, OnePlus and Xiaomi.
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