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December 30, 2016

Apple to Bolster Presence in India Through Tax Concessions and New Factories

by John_A

Following reports this month that Apple has been in talks to manufacture its products locally in India, as well as set up a distribution center in the country, an article by Bloomberg today suggests that the Cupertino company is now asking India to offer up tax concessions on iPhones created within its borders.

According to people familiar with the matter, Apple is asking for lower import taxes and manufacturing duties, which could lead to lower-cost iPhones — a solution that Apple CEO Tim Cook has admitted is needed in India.

In a separate report by The Times of India, industry sources claim that Apple is looking to build an iPhone manufacturing plant in Bangalore, India and begin production as soon as April. Specifically, Apple supplier Wistron is said to be the partner for the Bangalore facility, and the plant is poised to be a major contributor to the Indian iPhone supply chain by the end of 2017.

Top sources in the company confirmed to TOI that Apple is “very serious” about beginning assembly operations —and thereafter full manufacture — in India by the end of next year. “Bangalore is being looked at seriously,” said multiple sources within the company. Local manufacture will help Apple price its phones competitively as full imports attract 12.5% additional duty.

Earlier in the year, Apple announced plans to build an iOS App Design and Development Accelerator in Bangalore in order to support engineering talent and boost growth in India’s iOS developer community. Around the same time that the Accelerator was announced, the company revealed plans for a new development center in Hyderabad, India focused on Apple Maps development.

The concessions and new Bangalore-based facility are the newest steps in Apple’s attempt to bolster its presence in India. This year, Apple struggled with the government’s rules on foreign direct investments, but a ruling over the summer finally cleared the way for Apple to begin expanding its retail presence in the country. Despite India’s own growth as the third-largest smartphone market in the world, Apple sold 35 percent fewer iPhones in India throughout 2016 than it did in 2015.

Tags: India, Wistron
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