Apple said to seek lower taxes to start manufacturing in India

Apple Inc. wants India to offer tax
concessions on iPhones that the company
plans to manufacture in the country, a person
with knowledge of the matter said.

The company wrote to the industry ministry
last month seeking lower import and
manufacturing duties, the person said, asking
not to be identified citing rules on speaking
to the media. The concessions should
continue even after the government rolls out
its goods and services tax which is expected
to subsume all existing tariffs, the person

The Cupertino, California-based
manufacturer of iPads and iPhones is keen to
kick-start operations in the world’s fastest
growing phone market as growth slows in
countries such as China. Apple trails rivals
selling cheaper handsets in the $2 trillion
Indian economy and producing devices in the
country could accelerate the roll out of its
iconic retail stores to capture burgeoning
demand in the world’s second-most
populated nation.

Apple’s path toward a bigger slice of Indian
sales hasn’t been smooth. Its application to
open stores was rejected as it fell foul of
local rules that typically require at least 30
percent of components to be made locally
before a foreign company can sell through
their own outlets. Apple makes most of its
products in China and doesn’t currently meet
that criteria.

Apple’s spokesman in India, and Mattu J.P.
Singh, a spokeswoman at India’s Commerce
and Industry Ministry didn’t immediately
respond to e-mails seeking comment.
Prime Minister Narendra Modi wants
companies to make products in the country as
part of his “Make in India” policy, aimed at
reaping the benefits that come from
manufacturing facilities and jobs. His
administration doesn’t want technology
companies to sell products and take
advantage of its vast consumer base without
making their own capital investments.

The company wants to start discussions with
the tax department on future liability on its
India earnings, the person said. It has also
sought competitive advantages compared to
other economies where they are already

While Foxconn Technology Group — Apple’s
main manufacturing partner — has expressed
plans to assemble phones in the country for
brands like China’s Xiaomi Corp., most
iPhones are put together in China. The
Taiwanese company only began making its
first smartphones in India in the middle of

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