India government said likely to reject tax, trade concessions for Apple manufacturing deal

The Indian government will probably reject Apple's requests for waiving taxes and duties on imports in exchange for setting up local manufacturing, reports claimed on Tuesday ahead of a Wednesday meeting between the company and government officials.

"Since there is a strong correlation between value-addition and job creation, value-addition remains a priority for us," said a government source quoted by The Financial Express. "The Make in India program would suffer if every foreign player starts to demand concessions without actually doing much of value addition here."

Make in India is a program launched by Prime Minister Narendra Modi, designed to encourage both local and multinational corporations to manufacture products in the country.

"Our policies are not specific to any company," the source reiterated. "Whenever they are changed, we will ensure all those who meet the specified criteria get the sops."

Apple is believed to have an extensive "wish list" of concessions, including a 15-year tax holiday on imported parts and equipment, and waivers on many import duties. At the same time the company is supposedly flexible, willing to forego at least some of its requests.

That could be important, as some in the Indian government are said to be resistant to offering Apple any concessions that wouldn't be extended to other companies, including rivals like Samsung and Xiaomi.

Wistron has allegedly been lined up as Apple's first Indian manufacturing partner, and might even be set to produce 2017 iPhones. If Apple is committed to the idea, however, it won't have as much negotiating power with the government, since phones would need to enter mass production by July to ship in September.

10 Comments

Rayz2016 6957 comments · 8 Years

About 7 years ago

sog35 said:

What a horrible decision by India.

They want to 'protect' local companies, but all they are doing is stopping advancement and quality jobs.

If they give it to Apple then they have to give it to everyone. Should every foreign company be given a 15-year tax break on imported parts and equipment?

I sometimes think Apple's focus on tax deals and clever financial instrumentation is being used as a replacement for new products.

bloggerblog 2514 comments · 16 Years

sog35 said:

What a horrible decision by India.

They want to 'protect' local companies, but all they are doing is stopping advancement and quality jobs.

Nah, there is a middle ground and this is just part of the process of getting there. It's like buying a car, negotiation can go as far as walking out of the dealer and they calling you back to sign.

gatorguy 24609 comments · 13 Years

sog35 said:

What a horrible decision by India.

They want to 'protect' local companies, but all they are doing is stopping advancement and quality jobs.

It won't matter except that Apple might realize a tiny less profit. They'll still build handsets in India for the India market because why? It's profitable. The end result is smart decisions for both India and Apple.

Something odd about that picture.

sog35 said:

Rayz2016 said:

sog35 said:

What a horrible decision by India.

They want to 'protect' local companies, but all they are doing is stopping advancement and quality jobs.

If they give it to Apple then they have to give it to everyone. Should every foreign company be given a 15-year tax break on imported parts and equipment?

I sometimes think Apple's focus on tax deals and clever financial instrumentation is being used as a replacement for new products.

No country gives equal tax breaks to all companies. You give bigger breaks to companies that will benefit your economy more

Apparently that's what India means to do, so there's at least one. But a serious question for you:

Since it's obvious Apple means to sell iPhones and open stores in the India marketplace why should India give them a handout (so to speak), to do what they were going to do anyway?

Looking forward to your answer.