Dell, HP, and Apple Supplier Foxconn Apply for State Aid to Manufacture Laptops in India
Dell Technologies, HP, and Apple supplier Foxconn Technology Group are among the major tech companies that have applied for state aid in India to manufacture laptops.
The move comes as part of Indian Premier Narendra Modi's $2.1 billion financial incentive plan aimed at boosting local production of technology hardware.
Under the plan, companies are eligible for cash back of nearly 5% of the factory prices of finished products. By sourcing components locally, manufacturers can qualify for additional financial benefits. A total of 32 companies, including units of Indian contract manufacturers Optiemus Electronics and Dixon Technologies India, have applied for the incentives.
The Indian government aims to replicate the success it achieved in 2020 with incentives for local smartphone assembly. This led to increased production by Taiwanese Apple suppliers Foxconn, Wistron and Pegatron in India, resulting in Apple producing about 7% of its global iPhone output in the country.
Modi's administration expects companies to make an incremental investment of INR 24.3 billion ($294 million) and generate additional output worth INR 3.35 trillion under the six-year plan. Tech Minister Ashwini Vaishnaw stated that India is becoming a trusted supply chain and value chain partner due to its strong design capabilities.
Production under the plan could commence as early as next year. However, Apple has not yet applied for incentives to locally assemble its MacBook laptops and iPad tablets, according to government officials. It is important to note that not all applicants may receive approval for the financial stimulus, as previous smartphone incentives have shown that such programs tend to work well with a few companies that can rapidly increase production and achieve higher cash returns.
The IT hardware manufacturing drive also includes penalties for companies that fail to meet set production thresholds, with subsidies being deducted by up to 10%.
To encourage local assembly of IT hardware, India has announced plans to introduce a new license requirement for tech imports starting from November 1. This requirement will cover a range of products, including laptops, tablets, servers and components for data centers. Some US tech companies have expressed their concerns and objections to this move.
Dell Technologies, HP and Foxconn have applied for state aid to manufacture laptops in India.
The move is part of Narendra Modi's financial incentive plan to boost local production of technology hardware.
Companies can receive cash back of nearly 5% of factory prices by sourcing components locally.