Apple continues to bargain with government for manufacturing iPhones in India

Apple, iPhone 8, iPhone 7S, iPhone 8

Apple intends to manufacture iPhones in India and the government of India also wants the fruity company to set up manufacturing base in India, but the two are still haggling over concessions.

According to the latest information provided by Apple, the company has prepared a blueprint to begin manufacturing of iPhones in India and is continuously in touch with Government of India and negotiating fiscal concessions, including Customs duty waiver on import of components. Apple has also provided a detailed road map for setting up a manufacturing unit in India to an inter-ministerial group headed by Department of Industrial Policy and Promotion Secretary Ramesh Abhishek, sources have revealed. According to information from government sources, the presentation was delivered by senior executives of the company, including Global Vice-President (iPhone operations) Priya Balasubramanian.

India is the obvious choice for Apple after there has been a noticeable decline in sales of iPhones in two of its biggest markets – Apple and China. India has been pegged by many analysts as the fastest growing smartphone market in the world and to compete in a market where price is a major determining factor, Apple needs to cut the costs. This is why it is eyeing a manufacturing base in India. It, however, does not manufacture devices on its own and rather does it through contract manufacturers.

Besides exemption from the Customs duty on imports of components and equipment for 15 years, Apple wants relaxation in the mandated 30 percent local sourcing of components. On the duty and tax-related concessions being sought by the company, the sources said most of them are within the policy domain and decisions will be taken by the respective departments.

The official also said the company has indicated that it would gradually make India a major manufacturing hub for its products.

The company executives on Tuesday called on Commerce and Industry Minister Nirmala Sitharaman.

In a communication to the government, the Cupertino-based technology major has asked for several tax and other incentives, including long-term duty exemptions, to enter the manufacturing sector in India.

Currently, the government provides support by way of benefits under the Modified Special Incentive Package Scheme (MSIPS) to boost electronic manufacturing.