Apple wants massive tax breaks to set up shop in India

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iPhone India
Apple is asking a lot of the Indian government.
Photo: Ste Smith/Cult of Mac

Apple is currently weighing up the possibility of building new manufacturing facilities in India. Its decision rests on whether it can strike a deal over perks with the Indian government. Here are some of the things the company is requesting.

Apple is scheduled to meet with officials from Narendra Modi’s government in New Delhi next week. But prior to that meeting, it has issued a list of perks that it would like to secure, which includes breaks on taxes and duties for imports, according to Bloomberg.

Sources with direct knowledge of Apple’s plans say that the company won’t fight to secure every request on the “wish list.” However, the Indian government will be keen to meet at least some of Apple’s demands in an effort to attract business from the world’s most valuable company.

India has strict rules for local businesses that help boost its economy. One of those, which it has insisted Apple must adhere to, is that at least 30 percent of components used are to be sourced from local companies. The vast majority of Apple’s currently come from China.

India will relax this rule for three years so that companies can set up shop there before making supply changes. But Apple wants more. It is also requesting a waiver on customs duties for new and used equipment brought into India, and full exemption from duties on raw materials.

Apple also wants a 15-year tax holiday on imports of components and equipment.

“Historically, the government has given no such concessions to any other company and there is no room in the policy to do so,” said Anshul Gupta, a research director for Gartner. “What Apple is asking for is outside the trend so it will be interesting to see how the government looks at it.”

The problem India has is that if it gives into Apple’s demands, it sets a precedent that could be exploited by the likes of Samsung and Xiaomi. However, an Apple plant could mean tens of thousands of jobs for Indian citizens.

Not all of those citizens are encouraged by that, though.

“It’s audacious for the Apple management to come to India and demand that the government gives them special treatment,” writes R. Swaminathan for India’s Tech2.com.

“The bottomline is this: Apple needs India, for its cheap manpower, engineering muscle, R&D centres and, of course, buyers like you and me. So, Mr Cook, what are you smoking these days? Get real, get a strong coffee and become humble.”

It’s thought Apple has plans to assemble iPhones in India through a partnership with Wistron, a Taiwanese company that already has a manufacturing plant in Bangalore. This could help make the smartphone cheaper in India, where it is currently too expensive for the vast majority.

  • Gaurav Pandey

    It’s hilarious that Apple wants so much concession but doesn’t give any to us (customers) :P

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