The Indian government has reportedly asked Apple for more in-depth details about what it offers in terms of job creation and investment, in exchange for the government offering it additional tax concessions within the country.
Apple’s been seeking tax concessions to set manufacturing facilities in India for some time, but has been rebuffed. Now that one of Apple’s suppliers, Wistron, is officially building iPhones in the country, it seems the Indian government is ready to reconsider. Maybe.
Conceding to concessions
Apple’s requests involve ways to try and reduce the cost of its products in India to make them more affordable to average people in the country. This includes custom duty exemptions, duty waiver on import of components, permission to repair and re-export smartphones, and an easing of mandates insisting on the local sourcing of components.
If all this goes ahead, there’s a chance that Apple will push for more manufacturing in India.
Indian governmental departments including revenue, electronics and information technology, and industry are all deliberating on Apple’s request. According to India’s Economic Times, “A view on Apple’s application for tax concessions would be taken up after considering the levels of investments and the benefits that are likely to accrue to the Indian economy, sources said.”
Recently, Apple has been emphasizing the number of jobs that it has created. In a newly-launched website, Apple shares details about the “two million … and counting” jobs in the United States that it has created across the country. The hope of the Indian government is that it can do the same in India.
Playing hard to get
Whether Apple will commit to doing the same in India, and is rewarded with concessions, remains to be seen. So far, the Indian government appears to have been hardball with Apple over things like its desire to open official Apple stores in the country.
With India is projected to sell some 750 million smartphones by the end of the decade, and Apple currently claiming just 2 percent of the market share, Apple’s arguing position isn’t as strong as it could be. Still, given the kind of business that Apple brings with it, hopefully a mutually beneficial agreement can be reached soon.
My gut tells me this is going to be a long, drawn-out process, though.
