Update: As per new communication received from the Indian government, it appears that Apple’s demand from speical concessions are at least being considered.
Apple wants to set up a manufacturing unit in India, and is demanding special benefits — including tax perks. It was earlier reported that the government is not amenable to these demands.
However, as per Commerce and Industry Minister Nirmala Sitharaman, the government is considering these demands.
We are discussing that … no other mobile manufacturer have sought any extra concessions … we have not taken any decision.
She also added that,
I am not saying that we have said yes, I am not saying that we have said no.
Well, Apple setting up shop would bring along a lot of benefits. I mean look at Ireland, Apple has operations there and the country wants to let off billions of dollars of taxes that according to EU, are owed by Apple.
Previously: Looks like Apple is continuing to face stiff resistance from the Indian government with reference to its campaign to receive special tax breaks in the country to manufacture iPhones in the country.
The company is still in negotiation over pursuing manufacturing activities as part of India’s Make In India program. The Cupertino giant wants to open stores owned 100% by the parent company, but PM Narendra Modi wants it to source at least a few components (30%, to be specific) from within the country itself for the products to be sold in the stores.
It has demanded lower import and manufacturing duties, but as far as the recent development goes, it is evident that Apple is currently not eligible for any. However, the Cupertino-based company wants to be totally exempted from the local sourcing condition. Apple CEO Tim Cook had met with PM Modi last year to discuss the same.
It was reported on December 30 that Apple, through it’s component maker Wistron, planned to set up a manufacturing facility in Bangalore’s industrial hub Peenya.
The argument, as put forth by Trade Minister Nirmala Sitharaman, is quite simple: if India were to agree to any concessions, they would likely apply to all smartphone manufacturers, and not just Apple. That is, other smartphone and technology makers would naturally question the government as to why only Apple receives special ‘benefits.’ This would act completely against the government’s efforts to increase manufacturing and provide a level playing ground for all players in the industry, especially the homegrown brands like Micromax.
Apple’s request to import and sell refurbished mobile phones in the market has been refused by the government.
Apple is betting big on the India market, where it currently holds a minuscule 2% market share, what with slowing growth numbers in the developed markets like US and China.
This is not Apple’s first negotiation for tax breaks with a government, and the company itself is infamous for it’s tax evasion strategies. Back in August last year, the company was found to be the recipient of illegal tax breaks amounting to a sizeable sum and had been ordered to pay back $14.5 billion by the EU commission. At the same time, we might as well mention that the Foxconn plant in Zhengzou, China with ‘hidden’ tax perks for the iPhone maker.