| Log in
Reuters Photo Credit: Reuters

India resists giving tax concessions to Apple for local manufacturing

05 January, 2017

India is resisting tech giant Apple Inc’s demand for tax incentives to make iPhones in the country, with the trade minister saying on Thursday that the government may not make exceptions for the US company.

Apple wants to open its own stores in India, but has been asked by the government to locally source at least some of the components, as part of Prime Minister Narendra Modi’s bid to boost manufacturing in the country.

Apple has sought tax concessions, including lower import and manufacturing duties, to make iPhones locally, according to a government official familiar with the situation.

Trade Minister Nirmala Sitharaman said if India were to agree to any concessions, they would likely apply to all smartphone manufacturers, and not just Apple.

Apple declined to comment.

Apple’s Chief Executive Tim Cook met Modi last May to talk about its plans to enter the Indian manufacturing and retail space. Cupertino, California-based Apple wants to boost iPhone sales in India, where it has only a roughly 2% market share, as sales in the United States and China slow.

Smartphone component maker Wistron Corp, which counts Apple among its customers, has applied for permission to expand its plant in Bengaluru, a regional government official told Reuters on Monday.

The tech giant had earlier asked for a permanent relaxation of rules requiring 30% local sourcing for foreign retailers setting up single-brand outlets, which was rejected by the finance ministry. India has relaxed these rules for just three years for single-brand foreign investors.

India had also refused to allow Apple’s proposal to import and sell refurbished mobile phones in India.

The company has again sought a permanent waiver from local sourcing condition as it imports most of the handsets to sell in India and other countries, another official said.

India offers capital subsidies for companies manufacturing electronics goods in India, coupled with tax incentives for investments in special economic zones and allows tax-free imports of some components used to make mobile handsets.

“We have sent Apple’s file to the revenue department,” a top industry department official told Reuters. He said an inter-ministerial panel of the trade, electronics and finance ministry could take a final decision.

Like this report? Sign up for our daily newsletter to get our top reports.


Leave Your Comment
India to consider Apple's request for investment incentives

India to consider Apple’s request for investment incentives

Reuters 10 months ago
India will consider Apple Inc.’s request for incentives to invest in the...
Apple seeks tax incentives for suppliers to make iPhones in India

Apple seeks tax incentives for suppliers to make iPhones in India

Reuters 4 months ago
Apple Inc has asked the Indian government to extend tax breaks to its suppliers...
Apple to start India manufacturing soon with iPhone SE

Apple to start India manufacturing soon with iPhone SE

Varun Arora 9 months ago
Apple India Pvt. Ltd, the local arm of Cupertino-based Apple Inc., will soon...
No Comments

India resists giving tax concessions to Apple for local manufacturing

Powered by WordPress.com VIP