India to drop nearly $20 billion to lure Apple and others to build factories for key components, sources say

    Jan. 9 (Bloomberg) -- The Indian government is considering providing new subsidies to makers of electronic components and lowering import tariffs to help boost local manufacturing, especially of smartphones such as Apple's iPhone, according to people familiar with the matter.

    Bloomberg reports that India's Department of Electronics, Information and Technology has proposed to provide at least 230 billion rupees (about 19,624 million yuan) to support manufacturers of components such as batteries and camera parts. The ministry has also proposed to reduce customs duty on some electronic components at the request of the industry to reduce production costs.

    Sources privy to the matter said the components that the authority has proposed to subsidize include microprocessors, memory, storage devices, multilayer printed circuit boards, camera components such as lenses, and lithium-ion batteries. The amount of subsidy may vary by component. According to NitiAayog's research, India's current tariffs on electronic components range from zero to 20%, which is 5%-6% higher than countries like China and Malaysia.

    If the Ministry of Electronics, Information Technology and Science finally approves the passage, it may reveal the details when the government budget is announced in February. The Ministry of Electronics, Information and Technology didn't immediately respond to a Bloomberg request for comment.

    The Modi government has poured billions of dollars in incentives to lure companies such as Apple and Samsung Electronics to set up factories in India, with Apple's exports of iPhones from the country increasing rapidly as a result. Authorities hope to continue that momentum and create a more complete supply chain for smartphone makers, which currently import most of their electronic parts from countries like China.

    In addition, Microsoft (Microsoft) CEO Nadella said on the 7th, will invest $ 3 billion in India, expanding its cloud computing and artificial intelligence (AI) services, but did not specify the time frame.