Will Apple Make iPhones In India? Company Meeting Government Jan. 25

Apple has started receiving offers on moving the production of its products out of China. The company is already being wooed by both U.S. President-elect Donald Trump and the Indian administration under Prime Minister Narendra Modi to set up a production base in their respective countries.

Trump revealed in a recent interview that he had spoken to Apple CEO Tim Cook about making iPhones in the U.S. Trump said the CEO has his “eyes open to it” and that he believes Cook “loves this country and I think he'd like to do something major here.”

But for both countries, the question remains how to incentivise the tech giant to move production, given the freedoms such as lower tariffs it enjoys in China.

While India is not very keen on the massive tax concessions being asked by the California company, it is still willing to discuss the possibilities of a production base.

“We would very much like Apple to come and have a base in India, they have a base in China, and China is under stress. If a structured request come from them, we will surely consider with a open mind,” Ravi Shankar Prasad, India’s minister of communications and information technology, told reporters Wednesday.

The company is scheduled to meet government officials on Jan. 25 from the Department of Commerce, Industrial Policy and Promotion (DIPP), the departments of revenue, environment and forest, and electronics and information technology to deliberate on the possibilities of manufacturing plans for India.

But the situation seems challenging for the Indian government since Apple is asking for way more concessions than have been ever given to any tech company in the past. The tech giant’s demands include a 15-year tax holiday on imports of components and equipment, according to NDTV.

The meeting is expected to give a final outcome to the negotiations. It will be interesting to see which way the Indian government swings — if it does give Apple concessions, it would set a precedent that companies already producing in India, such as Xiaomi, would be eager to follow, which will in turn mean a high level of relaxation in the norms the country has had until now. If it doesn’t, Apple might simply move on to the next suitor, the U.S.

While Trump has claimed that he could get tech companies to manufacture in the U.S. by using measures such as a 45 percent tariff on Chinese-made goods, it is not as easy as it seems. Companies such as Apple will need a high level of incentivizing since at current prices, the cost of production in the U.S. would still be high in comparison to Chinese manufacturing costs even if the proposed tariff is imposed.

Additionally, Cook believes that the U.S. does not have enough skilled workers for manufacturing iPhones domestically while India already has a flourishing mobile manufacturing industry with companies such as Foxconn setting up plants in the Indian state of Andhra Pradesh.