At present, Apple’s iPhones cost more in India than they do almost anywhere else in the world. For Apple, that has already been a setback of sorts, considering that the Indian smartphone market is perhaps the only major market that is completely untapped for the Cupertino-giant. Thanks to huge import taxes and deterrents among other things, iPhones still come at a premium.
But the scope concerning alteration in prices has also been dismissed today with the disapproval of Apple’s tax concession demands by the Department of Revenue in Commerce Ministry. These demands also incorporated relaxation in the 30% local sourcing of components. The Cupertino giant who is planning to kick off a manufacturing unit in India may get a setback with the decision announced by the government.
In a bid to master the fastest growing smartphone market, Apple conveyed its interests to Department of Industrial Policy and Promotion (DIPP), which further forwarded its demand to its revenue counterpart. Along with 30 percent relaxation in the component sourcing, Apple had asked an exemption from the Customs duty on imports of components and equipment for 15 years. Since no other international manufacturer in the country is enjoying such benefits, the government responded with a no.
As per the sources of Deccan Herald, Officials while reasoning out the decision said,
Decision is taken for everyone. So no company-specific decision could be taken.
Moreover, the demands sought by the U.S. based technology major do not fit within the proposed Goods and Services Tax (GST) regime.Apple is currently facing a hard time in U.S. and Chinese markets with a drastic fall in sale of its products. The rejection may upset company’s India targets, which still remains a potential market and presents hope to the company.
Earlier in January, we reported that Apple was finally gearing up to begin production of iPhones in India. It not only presented a detailed presentation to the government but further announced plans of assembling its smartphones with iPhone SE. Initially, the company will be assembling around 3 to 4 lakh units of iPhone SE at its plant located in Karnataka.The manufacturing plant is intended to set up by its contract manufacturer Wistron.
Meanwhile in the neighbouring market–China, the company further extended its presence and will open two new R&D centres in Shanghai and Suzhou. It is not only increasing its trips but also its commitment to the country.The company has confirmed the flailing sales figures in its quarterly reports on the regular. Thus, Tim Cook’s ongoing visit is particularly significant for the Cupertino giant, who’s looking to further contribute its fair share.