India launches US$2 billion drive to woo laptop makers like Apple

(May 17): India is unveiling a 170 billion-rupee (US$2.1 billion) financial incentive plan to draw makers of laptops, tablets and other hardware to the South Asian nation as companies look to diversify supply chains beyond China.

Prime Minister Narendra Modi is capitalizing on the early success of Apple Inc’s local assembly operations — which have helped the US company produce about 7% of its global iPhone output — to pitch the country as a viable global manufacturing hub. New Delhi wants to bring more tech production to India after China’s trade war with the US and its strict Covid policies prompted companies to weigh other options.

Apple has yet to begin making iPads or MacBook laptops in India, but fresh incentives could push the Cupertino, California-based company to consider such moves. Other manufacturers who could take advantage of the new measures include Dell Technologies Inc, HP Inc and Asustek Computer Inc.

“India has crossed a huge landmark in mobile phones with exports of US$11 billion in the past year,” India’s technology minister Ashwini Vaishnaw said at a news conference Wednesday. “We want to take this momentum forward.”

The plan proposes a cashback of 5% to companies on factory gate prices of finished products. Local sourcing of components will help manufacturers win more financial benefits.

In 2021, India launched a program worth 73.5 billion rupees to ramp up local manufacturing and build exports of IT products such as laptops, tablets and personal computers, but that effort failed to attract companies due to perceptions the incentives were too small.

Chinese manufacturers such as Lenovo Group Ltd could find it difficult to win incentives amid a frosty relationship with India since a Himalayan border clash in 2020.