"The government is considering a set of demands put forward by Cupertino-based Apple Inc before beginning to manufacture its phones in India. The local phone-making industry has also been against Apple’s demands to import refurbished phones.Analysts note that top smartphone makers such as Samsung, Huawei, Oppo and Vivo already have local manufacturing in India without preconditions. He also pointed out that concessions the government may grant should be dependent on the value addition the company does locally. "The concessions should not be for pure assembly; if Apple only assembles phones here, the value addition will be very less as components will still be imported,” he added.In order to improve value addition levels, which are at a mere 6% at present, the quantum of addition and the proportion of benefits should be defined.According to an IIM Bangalore-Counterpoint study, contribution of locally sourced components and sub-components is just 6% to the total value of components going into a phone. It is estimated that true local value addition will be around $650 million of total $11.6 billion of total value of phones sold in 2016, keeping the value addition share stagnant.“Given the right policy framework, this may also pave way for downstream investment in component-level manufacturing and kick-start export of goods,” OnePlus’ Agarwal added, underlining the importance of policy parity to make India a global manufacturing hub, which may otherwise take several more years.

Source: Economic Times January 27, 2017 19:29 UTC