Apple 'wish list' for Indian manufacturing includes breaks on taxes & duties for imports
Ahead of a meeting on Jan. 25, Apple has sent out a list of concessions it wants from the Indian government before setting up local manufacturing — though it won't necessarily push to get them all, according to a report.
The company's requests include a 15-year tax holiday on imported components and equipment, as well as a waiver on customs duties for the latter whether new or used, Bloomberg said, citing a source with "direct knowledge" of the issue. The Indian Express suggested that Apple is asking for total exemption from duties on materials, components, and capital equipment — the Bloomberg source, however, said that Apple is treating its demands as a "wish list," rather than a set of absolute musts before Apple will bring its partners in.
The person reiterated claims that Apple is initially partnering with Wistron for Indian manufacturing, rather than Hon Hai/Foxconn, possibly starting at an existing plant in Bangalore's suburbs. Other companies including Foxconn could join in later on, the source said.
Next week's meeting — to be held with people from various Indian government deparmtents — could be decisive. While the country's Information Technology minister has promised an "open mind," others in the government have been resistant to offering Apple unique concessions. India does offer preferential arrangements for foreign multinationals, such as Special Economic Zones, but giving them to one company would be unprecedented.
One possibility is that anything offered to Apple will also be extended to its competitors, such as Xiaomi and Samsung.
Indian manufacturing would have a two-fold benefit for Apple, including meeting sourcing requirements for setting up local Apple stores, and potentially reducing the cost of its products in the country. The iPhone in particular has a miniscule marketshare, as it's considerably more expensive than most phones sold in the region. Building the device in India would let Apple avoid a 12.5 percent import duty and lower prices without eating into profits.