Tech giant Apple has been meaning to set up its shop in India for a long time now. But, according to a recent statement given by the country’s trade minister Apple is most likely to fail in its mission to earn tax incentives to make iPhones in the country as the government is not willing to make any exceptions for the United States- based tech company.
Apple eagerly wants to establish its stores in the fastest growing smartphone market in the world, but it has been asked by the Indian government to source at least some of the iPhone components locally from the country so as to boost the country’s floundering manufacturing sector. In order to make this possible, Apple has asked the government to provide it some tax concessions, including lower manufacturing and import duties.
Commenting on the demand, Trade Minister Nirmala Sitharaman has reportedly said that if the Indian government would agree to give any such concessions, it would most likely extend the same olive branch to all smartphone manufacturers, and not just give a special treatment to Apple.
There hasn’t been any official response by the tech giant on Sitharaman’s comment yet.
Tim Cook, Apple’s Chief Executive, came down to Indian to meet Indian Prime Minister Narendra Modi last year in May to discuss about the company’s plan on entering the Indian manufacturing and retail space. The US-based company wants to cash on the growing smartphone market in the country, where it currently holds only a roughly 2% market share.
Reuters recently reported that Smartphone component maker Wistron, which also has tech giant Apple among its long customers list, has recently applied for a permission to expand its manufacturing plant in the city of Bengaluru.
Prior to asking tax incentives, the tech giant had pleaded the Indian government to provide a permanent relaxation from rules that require at least 30 percent of local sourcing for foreign retailers setting up single-brand outlets in the country. This demand was rejected by India’s finance ministry. The country has relaxed these rules for just a three years window for single-brand foreign investors.
For now, the future of Apple in India for sure seems bleak.