India Offering Apple Tax Concession to Expand Production of iPhones
India has offered to allow Apple to import mobile handset components intended for use in local manufacturing tax free, a top government official said on Tuesday. The tax concessions will be subject to the condition of increasing local value addition over a period of time.
Local production of the iPhone SE started earlier this month.
Reuters now reports:
A panel of ministries rejected that demand and has offered a phased program to increase the share of local production in the manufacturing, Aruna Sundararajan, Secretary at the Ministry of Electronics and IT said.
“We have offered them tax exemptions on those components which could not be manufactured in India,” Sundararajan told Reuters, adding that local manufacturing component would have to be increased gradually.
India wants Apple to raise value addition share in phases of 3,5,7 and 10 years as the local capacity builds up, part of Prime Minister Narendra Modi’s plans to boost manufacturing.
India is the world’s fastest growing smartphone market in the world and at the moment, Apple has a paltry market share in that country solely due to its higher-priced/high end product strategy. Local assembly/manufacturing will greatly help Apple to make some serious in-roads in India.