Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.

There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Tuesday, 23 May 2017

Will Tesla follow Apple ?



In a tweet , 2 days back , Elon Musk had expressed reservations re setting up of a EV manufacturing plant in India



He had presumed that such a plant would have to source , at least 30 % of the components locally – a condition , which he felt , was difficult to comply with



Yesterday , DIPP  has clarified ( of course , in a “ tweet “ for “ tweet “ fashion ! ) that , for setting up a local manufacturing plant , there is no such condition



What that tweet did not say :

Tesla is welcome to import any and all the components that it wants to – of course , after paying the applicable “ import duty “ – like all other foreign car manufacturers who have set up manufacturing operations in India , over the last 15 years



Now , ordinary mortals like me felt that this “ omission “ was due to the 140 characters limitations of a tweet !



But who could have suspected that the  REAL REASON  for this omission could have well been, today’s following announcement ?



“ GOVT READY TO OFFER APPLE , TAX SOPS IF IT MAKES MORE IN INDIA “



Economic Times provides following highlights :


·         Government agrees with Apple that some of the components that go into its products can’t be immediately manufactured in India


·         Govt has made a list of products that can be imported duty free till they are ready to be made locally


·         Govt has defined different components that will be ready to be made locally over the next three, five or seven years




Eco Times quotes , Aruna Sundararajan , Sec , Ministry of Electronics & IT as follows :


Apple’s road map is slightly different ( from ours ) and we are looking at harmonizing it


If they agree, then they don’t need any special concessions because then they will be falling in line with our manufacturing plan “



Govt has proposed to Apple , the following Phased Manufacturing Program ( PMP ) :


2017-18  :
Mechanics , Die-cast parts, Microphone and Receiver , Key Pad and USB cable



2018-19  :
Populated Printed Circuit Boards, Camera Modules, and Connectors



2019-20  :
Display Assembly, Touch Panels , Vibrator Motor and Ringer





Nothing revolutionary here to anyone who applied for an Industrial Manufacturing License , around 1970  !



At that time , one was required to submit a PMP , along with the IL Application



And , even provide the figures of increasing “ local content ( by value ) “ in the selling price of the product proposed to be manufactured locally ( indigenization  )



And even provide , figures of “ Anticipated Value “ of Import Licenses required for each phase ! And provide figures for components imported and products made / sold , each year !



One only hopes that what Govt proposes to Apple is made “ public “ on DIPP web site so that there is ,


·         Total transparency


·         No ambiguity  (  no scope for arbitrariness  / discretion  )


·         Absolute clarity



And if an identical policy frame work is prepared – and made public on DIPP web site – in respect of Electric Vehicles , there would be no need for Elon Musk to tweet ( his apprehensions ) , nor any need for a tweeted response !



-------------------------------------------------------------------------------------------


Dear Elon :



For immediate approval ( in 24 hours ) , pl submit your PMP as follows :



2017-18  :
Set up factory next to Mundra Port ( Gujarat ) to facilitate world-wide exports



2018-19  :
Source locally , Tyres / Chasis / Body / Electricals  / Windows / Dashboards ..etc



2019-20   :
Manufacture in your own factory , Li-ion Battery  / Wall-mounted Powerpack Storages /
Solar Roof Tiles



2020-21  :
Manufacture  RFID Sensors - Cameras – GPS locators



2021-22   :
Augmented Reality  Devices  /  Autonomous Navigation Devices ( Radar – Lidar  )





Now , it is very possible that neither Shri Gadkariji , nor Shri Goyalji , would be satisfied with such a slow PMP , spread out over a period of 5 years



They may , well request  Elon to cut it down to 3 years



And , if they do, I get a feeling that Elon would telescope the entire PMP , in 2 YEARS !



After all , Elon is the biggest proponent of :









24  May  2017



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