Apple's ‘Make In India’ Plan Hits Hurdle: iPhone Maker May Not Get Tax Concessions

Apple Inc. might have looked towards India as an alternative as iPhone production costs in China increase, but that does not entail that it guaranteed any special concessions there as it could set the wrong precedent for other companies, according to a government source.

“Apple is asking for concessions that others are not asking. We have to follow the rule book. Otherwise, anybody can stand up and say why only Apple and why not others,” a commerce ministry officer told LiveMint Wednesday on the condition of anonymity.

Apple has been going back and forth with the Indian government over the production facilities for its iPhones. India is one of the world’s fastest growing economies — the sales of Apple products, sold mainly through third-party retailers in the country, crossed $1 billion in 2015.

Apple meanwhile is looking for alternatives to China, where a huge chunk of its production takes place. The Indian government had already provided Apple a three-year grace period which excludes it from the stipulation that foreign companies must buy 30 percent of their components in the country. But the government does not seem eager to give in to its demands for concessions such as lower import and manufacturing duties.

According to a Times of India report published last week, the company is “very serious” about beginning assembly operations in India and thereafter fully manufacturing its devices in the country as local manufacturing would save it at the very least the 12.5 percent import duty on its products.