Apple has apparently had a word with the Indian government regarding the manufacturing of its globally popular iPhones. The company is mulling over opening a manufacturing plant in the country and has sent a letter to the government requesting financial incentives.
The step comes even as India has projected itself as one of the most prominent markets for smartphone companies in a global market that is rapidly saturating. Considering the sheer number of companies in the arena, the level of competition is very, very high.
Over the past few years, the demand for iPhones has drastically increased. Opening up a manufacturing facility in India would not only help the company increase the supply of the product, but may also help lower the cost of the product to an extent. At present, our government policies imposes heavy taxes on imported electronic product , to encourage local manufacturers. Right know the product is completely manufactured in China by Foxconn and the R&D is mostly sourced from the U.S.
If Apple and the Indian government do manage to find common ground, the country would also benefit thanks to job creation by Apple and a requirement of services from its auxiliary companies
According to Zauba.com, accessories boxed with the iPhone are taxed separately, and only last year, taxes in India were more than double of the custom duty paid for the iPhones at 28.85%. All this means that the final price for these devices are ridiculously high. Manufacturing or assembling products in India can certainly help brands reduce the prices. Currently Apple pays an import duty of 12.5% on every iPhone it sells in India. Apart from central taxes, Apple has to pay the hated Value Added Tax (VAT) to various states on the total price of the phone.
Seeing the willingness of Apple to set up manufacturing plants and flagship stores, the Indian government announced that it was relaxing the norms around single-brand retail stores for foreign entities. This paved the way for Apple to launch its stores in India. Now, we are down to manufacturing.
Apple will probably sell off its inventory of older iPhones, mainly the 16 GB versions, by pricing the newer ones very high. Once it has cleared the stocks, it could then bring in the new, Made In India smartphones, that will hopefully be cheaper.
However, lets not jump ahead of ourselves. Made in India iPhones would be beyond cool, however, there is a mountain of efforts before such a thing can come to pass.
