In a fresh round of demands, Apple has asked the Indian Government to extend the tax benefits that are being offered to them.
Apple’s demands come in lieu with its hopes to position itself as a big manufacturing hub for iPhones and its components here in India. The tax benefits currently being offered are apparently not enough to fulfil that vision. Gadgets 360 reports —
“The US tech giant has been in talks with Indian officials since May of last year, when CEO Tim Cook and Prime Minister Narendra Modi agreed to set up a production base in the country that goes beyond just assembling the devices, as happens today. The two sides have been discussing a list of “prerequisites” that Apple submitted in October, including duty exemption on raw materials for manufacturing components and capital equipment for 15 years for it to make iPhones from scratch in India.”
The Government says that granting such tax benefits to Apple would require us to draft new policy framework – something that applies equally to all the manufacturing companies. Apple, however, wants special relaxations of laws so as to gain a competitive advantage over other players.
“They want the same treatment to be given to the component manufacturers; the tax concessions, they want everything. But then some kind of policy will have to be evolved,” a government official said.
Apple India is already gaining up on the huge deficit in market share between the iPhone and its competitors. A big push in that direction came from the iPhone manufacturing unit that was established at Bengaluru and which is now fully functional. India is only the second country after China to have such an independent iPhone production unit.
While Apple’s demands of exclusive tax benefits might seem outlandish to us, the government might be more accommodating. The report by Gadgets360 continues —
Another official said Apple’s proposal to build its phones in India was being examined favourably by the government.
“My view is that India needs to support Apple to create an ecosystem, which was done for Maruti. This helped to build the automobile and auto component industry in India,” the official said, seeking anonymity in line with government policy. “Initial support will pay rich dividends in the long run and facilitate innovation, design and manufacturing of electronics components in India,” the official added.
We know that Tim Cook and Modi have met on multiple occasions and we’re sure that there will be some benefit to Apple coming out of all those meetings. Just how far the Government is willing to go, however, is something we will have to wait and see.
