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 ) :
Mechanics , Die-cast parts, Microphone and Receiver , Key Pad and USB cable
Populated Printed Circuit Boards, Camera Modules, and Connectors
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 :
Set up factory next to Mundra Port ( Gujarat ) to facilitate world-wide exports
Source locally , Tyres / Chasis / Body / Electricals / Windows / Dashboards ..etc
Manufacture in your own factory , Li-ion Battery / Wall-mounted Powerpack Storages /
Solar Roof Tiles
Manufacture RFID Sensors - Cameras – GPS locators
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
24 May 2017
www.hemenparekh.in / blogs