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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.