Apple wants tax incentives to boost iPhone assembly in India

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iPhone assembled in India
One of the first iPhones "assembled in India."
Photo: Indian Express

Apple is hoping to secure new tax incentives in India that will allow it to increase local iPhone production and export more devices to be sold in other countries.

The company has teamed up with other large names in the Indian Cellular and Electronics Association (ICEA) to propose a raise in export credits on smartphone shipments, as well as tariff cuts on imports of components and machinery.

The group argues that manufacturing growth cannot be sustained and accelerated without the changes.

Apple, alongside “some of the industry’s biggest names,” made the proposals in a 174-page document that was submitted to the Indian government ahead of its annual budget announcement next week, Reuters reports.

“As the country is nearing to achieve saturation point… without an export take off manufacturing growth cannot be sustained and accelerated,” the document reads.

Apple wants lower tariffs and higher credits

The ICEA calls for an increase in export credit received on the value of mobile phone shipments — from 4 percent to 8 percent. It also asks for the introduction of a 5 percent export credit on services like mobile apps, and lower import tariffs on machinery.

This would allow manufacturers to ramp up production in India without being punished for doing so, and increase exports of devices to be sold in other countries.

Apple started manufacturing the iPhone in India in 2017. Its assembly partner, Wistron, currently produces iPhone 6s and iPhone SE units, most of which are sold locally. However, Apple and Foxconn, its largest manufacturing partner, have bigger plans.

Made in India

In line with India’s “Make in India” campaign, Apple wants to help make it a global smartphone manufacturing hub. It seems India would like the same, with plans to export $9 billion worth of smartphones in the year ending 2020, up from just $100 million in 2017.

But despite its push for local manufacturing, which has already created over 600,00 jobs, the government continues to raise obstacles that make growth difficult.

India will soon begin taxing imports of touch panels, two months earlier than planned. This has been particularly problematic for Samsung, which recently wrote to the federal government to explain it could not manufacture two of its flagship devices locally because of the tariff.

“Despite some improvement in exports since 2015, India still has a long way to become an export hub,” the ICEA said.