Telecom Vendors

Apple wants tax cuts in India to manufacture products

As India seeks to become a manufacturing hub for iPhone products and components, Apple has demanded the Indian government to extend tax breaks to its suppliers. If the government were to meet the request, officials said, it would require a new policy that could apply to all device-makers in the country.

The Californian iPhone-maker has been discussing the issue with Indian officials since May 2016, when chief executive Tim Cook met with Narendra Modi and agreed to establish a production base in India that acts as a base for more than just assembling devices.

“Prerequisites” are being discussed by Apple and India that the company submitted in October last year, including duty exemption on raw materials for manufacturing components and capital equipment for 15 years for Apple to be able to manufacture iPhones from scratch in the country.

Apple plans to bring in a multitude of these ancillary units when setting up operations in India, a government official said, which will contribute to the country’s transformation into one of the world’s fastest growing smartphone markets. But the government insists that Apple’s requests will have to be part of a wider policy implementation.

Apple only has a two percent share of India’s smartphone market, and the government’s delay in answering the company’s requests could harm its penetration of the market. China was once a major growth-driver for Apple, but its revenue dropped 14 percent year-on-year in the country in the three months ended April 1.