India Offers Tax Concessions to Apple to Boost Local Production of Mobile Handset Components

India has offered Apple tax concessions to boost production in the country, according to a report published by Reuters. A few days back, Cupertino, California-based company started manufacturing iPhone SE at its Taiwanese contract manufacturer Wistron’s plant in Bengaluru, and now the Government of India has decided to offer Apple tax-free import of mobile handset components needed for local manufacturing. The tax concessions will be subject to the condition of increasing local value addition over a period of time.

On Tuesday, Ravi Shankar Prasad, the union minister for Electronics and IT, said Apple wants to expand its contract manufacturer’s facility in the Indian tech hub of Bengaluru.

During first quarter of 2017, Apple sold over 50 million iPhones, down 1 percent year-on-year.

Apple had initially demanded Indian government to give it a 15-years tax concession for all components that will be imported for setting up a manufacturing facility in India. This demand was however rejected by the government. Apple was offered a phased program to increase the share of local production in the manufacturing.

“We have offered them tax exemptions on those components which could not be manufactured in India,” Aruna Sundararajan, Secretary at the Ministry of Electronics and IT told Reuters.

She also added that union government wants gradual increase in local manufacturing of component.

According to reports, the union government wants iPhone maker to raise value addition share in phases of 3, 5, 7 and 10 years as the local capacity builds up.

“It will be a little early to say that India and Apple have agreed on the common ground,” said the official, adding India is all set to figure out a roadmap to encourage manufacturing.

The government however does want to become the country a “dumping ground” for used iPhones, and this was the reason why Indian government earlier rejected Apple’s proposal to manufacture refurbished iPhones in India.

About Apple

 Founded in April 1976 and headquartered in Cupertino, California, Apple is an American multinational company that specializes in design and development of consumer electronics and computer software products. It was founded by Steve Jobs, Ronald Wayne and Steve Wozniak with an aim to develop and sell personal computers. It was then incorporated as Apple Computer, Inc. in January 1977. In 2007, the company was renamed as Apple Inc. Today, Apple is popular among consumers for its products like iPhone smartphone, the iPad tablet computer, and Mac personal computer. It is world’s largest IT company by revenue, the world’s largest tech company by total assets, and the world’s second-largest mobile phone manufacturer. It became the first U.S. company in 2014 to be valued at over US$700 billion.

Some other popular products of Apple include iPod portable media player, Apple TV digital media player, and the Apple Watch smartwatch. The consumer software created by Apple includes the macOS and iOS operating systems, the Safari web browser, the iTunes media player, and the iLife and iWork creativity and productivity suites. Apples’s online services include the iOS App Store, Mac App Store, iTunes Store, Apple Music, and iCloud.