In early October Patently Apple posted a report titled "Indian Government Considering Exemptions sought by Apple for setting up another iPhone Assembly Unit." Yet once again, the Indian government had shown to have no interest in working with Apple. A new report published today claims that Apple's latest proposal to the Indian Government has been rejected outright.
According to Reuters, Apple "has been in talks with Indian officials for months, seeking "pre-requisites" - government tax breaks and incentives - for expanding its operations in one of the world's fastest-growing smartphone markets.
During those talks, Apple has conveyed it wants India to defer an existing policy that plans to levy taxes on more imported mobile components in line with Prime Minister Narendra Modi's "Make in India" drive to boost domestic manufacturing.
While India's government has been keen to get Apple to manufacture in India as a showpiece investment, it has told the U.S. firm there would be no policy exemptions, so there will be no tax breaks on parts imports, the people said.
'Apple wants duty-free imports of components. India wants indigenization,' said one person with direct knowledge of the talks.
Apple has expressed willingness to increase local value addition over time, but has stuck to its demand for immediate import tax relief to expand its iPhone manufacturing, the person added.
While the government has publicly said it is still considering Apple's demands, the people familiar with the talks said it has made clear it won't make any special concessions. The disagreement could be a stumbling block, and risks delaying Apple's plans to penetrate the Indian market." For more on this, read the full Reuters report here.
In mid-October Patently Apple posted a report titled "India is Close to being a 'Basket Case' Country when it comes to working with Apple." We had noted in the report that 24 hours after the Indian Government had reportedly indicated that they would consider exemptions sought by Apple for setting up another iPhone Assembly Unit, they said that there would be no special concessions for Apple.
In the Indian Prime Minister's travels around the world he's been desperately urging large corporations to come to his country and open plants to give his people work. And yet it's pretty clear that they also want companies to bow to their rules or be locked out of their market. For Apple, it's been a long standing stalemate with no end in sight while the low-priced Chinese smartphone OEMs are rushing in to build a fan base to keep Apple irrelevant in that market.
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