Apple’s Macs win reprieve as India licensing plan put on ice

Apple grabbed around 50% more PC market share with the Mac in India over the last year, so the company was probably displeased when the government there tried to put a tough limit on sales of computers made outside those shores.

Now it has won a welcome reprieve.

What’s the story about Macs in India?

India will now delay an import licence regime it had originally intended to put in place to tax laptops and tablets made outside the country of a year.

The announcement of this tax had raised hackles across the PC industry, and manufacturers and the US government spoke against it in meetings with India leaders. The impact of the tax would have immediately raised the cost of PCs sold in India, and this would have particularly impacted makers like Apple, Dell, HP, and Samsung.

Following these representations, India decided to delay the ban for three months, but that delay has now been extended to a year during which the plan will be reconsidered, Reuters said. Manufacturers will need to get registration certificates for imports, but this process is less onerous.

What matters about this?

What matters about this is that India is already drawing huge benefits as manufacturers seek to make their supply chains tougher by building up manufacturing there as well as in China and elsewhere.

Apple and its partners have made particularly huge investments, and now seem to be in position to manufacture a huge number of iPhones in India, but getting there has quite literally cost billions.

Within that context, while it’s good that India is offering various forms of inducement to encourage manufacturers to expand manufacturing in the country, most big firms who do make stuff can only invest so much in new production facilities in any year. Within that context, India came close to shooting itself in the foot, sacrificing the goodwill it has already built with makers.

What happens next?

Of course, the next step here is that the likes of Apple will expand the products they choose to manufacturein India, but this really was on the cards all the same. We already see it happening.

However, I think what will happen next is that these licensing proposals will be put on ice for at least another couple of years, but manufacturers, Apple and others must see this as a warning as to how unpredictable any nation state can be when it comes to factory politics. With this in mind I suspect that most makers will seek third and fourth echelon manufacturing nations from which to scale up production in the event of political change or other forms of instability.

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