Apple Wants Tax Breaks for Suppliers – Keen to Make India Manufacturing Hub for iPhones if Government Allows Tax Concession

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Aug 1, 2017
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Apple has set its sights towards India as a key manufacturing hub for future iPhones and components but for that to take place, the tech giant requires a massive request to be fulfilled by the Indian government; tax breaks for Apple’s suppliers. If the company is granted such a request, it will be a major breakthrough for a highly populous country, and can even result in a spike of employment.

Apple Wants Several Requests to Be Fulfilled Including a 15-Year Duty Exemption for Raw Materials – Negotiations Are Still Being Carried Out

It is no question that Apple manages to outsell every smartphone manufacturer out there and those statistics alone might persuade the Indian government to grant the company’s request of major tax breaks in order to set up manufacturing plants for iPhones in India. However, government officials according to Reuters state that they will need to draw up a new policy that applies fairly to other device makers or risk upsetting them in the process.

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Negotiations are still being carried out, which commenced in 2016. CEO Tim Cook and Indian Prime Minister Narendra Modi agreed to set up a production base in the country that goes beyond just assembling the devices, as happens today. A top government official states that Apple requires all-around treatment to not just the company itself, but to its key partners.

“They want the same treatment to be given to the component manufacturers; the tax concessions, they want everything. But then some kind of policy will have to be evolved.”

Apple wants to penetrate the Indian market because the region is the second-most populous country in the world. Establishing a manufacturing hub will allow more sales to be generated and there’s also a potential in the country because the U.S.-based giant only possesses a 2 percent market share.

The manufacturing of the hub to make iPhones from scratch could also mean that the consumer might not be forced to pay more due to duty and shipment of smartphones from different countries, which could result in an even higher iPhone growth in the country while increasing exports too.

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If the request is given the green light, then it will become another catalyst for Modi’s ‘Make in India’ campaign. However, what Apple requires from the Indian government for just its own needs might not be sitting well without delivering a fair policy that is just to other smartphone manufacturers too, so it looks like these talks will continue to take place for the time being.

However, things are looking bright for India’s smartphone market because custom duties have already been reduced to encourage other companies to set up manufacturing bases in the country.

Source: Reuters

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