India resists Apple’s demand for the tax incentives

Tim Cook and PM Modi

The tech giant Apple is currently in talks in India for its plans to start manufacturing unit in the country. According to a post from Reuters the company is demanding special concession from the Indian government for its plans. However, the country is resisting the company’s demand for the tax incentives, as the trade minister said on Tuesday that India can’t offer special exceptions for the U.S. company.

Commerce and Industry Minister Nirmala Sitharaman said that the country can’t give special and privileged terms and they are unable to offer extra concessions, however the decision isn’t final. Being diplomatic in the statement she said, “I am not saying that we have said yes, I am not saying that we have said no”.

Currently, 42 foreign smartphone manufacturers are making their products in India, including Chinese firm Xiaomi and Huawei. And these firms are already getting benefits from the Modified Special Incentive Package Scheme (MSIPS) to boost electronic manufacturing in the country.

With MSIPS, the government provides financial incentives to offset disability and attract investments in the electronics hardware segment. It also gives a subsidy for investments in Special Economic Zones, among other benefits. Explaining the same, DIPP Secretary Ramesh Abhishek said that the government keeps getting requests from several firms for incentives and the Apple’s request is one of them.

He further added”The government examines (all the requests) with appropriate departments. All such requests are examined in consultation with concerned departments and that process is on.”

As a part of PM Narendra Modi’s bid to boost Make In India, Apple is looking forward to open its own stores in the country but has been demanded from the government to locally source at least some of the components.

Last week, the company’s CEO Tim Cook had met with PM Modi for the plan in manufacturing and retail in India, as the Cupertino giant is looking to expand its presence in the second largest smartphone selling nation. Apple is pursuing a license to set up its own stores, which could start to open as early as next year.

Not only Apple, India is also keen to get the firm to commence making its products in the country. As of now, government officials aren’t available to comment on the matter, while an Apple spokesperson didn’t respond to an email from Reuters seeking comment.

If Apple starts local manufacturing in India, it would help the company to open retail stores in the country where its iPhones account for less than 2 percent of Indian smartphones sales. Also, it would lead to job opportunities for the Indian citizens.

Currently, Apples products are manufactured in six countries, including South Korea, Japan and the US.

About the author

Rishabh Rajvanshi

Rishabh, with six years of experience in the newspaper industry, has co-founded The TeCake in 2013. Apart from writing and editing articles on Technology at The TeCake, he also contributes to other esteemed newspapers.

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