Apple may discontinue its India plan in absence of viable offer from Indian govt

iPhone maker Apple may discontinue its first phase of manufacturing, which is undergoing in Bengaluru, if the government fail to offer a viable financial proposition to the company.

Last year, Apple’s has sought concessions and exemptions, which remain pending till date, from the government to manufacture Apple products in the country.

It has also asked for a concession on the 30 per cent compulsory local sourcing of components. The Indian government had earlier in May this year had offered to allow Apple Inc to import mobile handset components intended for use in local manufacturing tax-free.

Apple’s demands for a customs duty rebate on imported equipment for making iPhones and a 15 years tax holiday for all imported components had been rejected by the commerce and industry ministry.

However, the government has said that they are looking forward to the company setting its base in India.

“We look forward to them expanding their manufacturing footprint in India. We also welcome if the ecosystem of component manufacturing units of Apple also move with them. Discussions are being held with Apple by the government. Given the market opportunities and favourable ecosystem which India offers, we think there is win-win opportunity here,” Ajay Kumar, additional secretary in the ministry of electronics and information technology, was quoted as saying to Mint.

Meanwhile, the government also asked details on the scale of the proposed investment in the second phase for manufacture of Apple iPhones in India, the proposed capacity and likely employment to be generated

The company has got double digits growth in revenue sales in India. Of late, Apple revenue figure saw a plunge of 14 percent in China.  It doesn’t want to lose India. Apple is second to Samsung in used mobiles segment with 20% of share. The company has not yet made any official comment on the development.

Earlier, the iPhone maker had started selling iPhones at select stores in the country. Later, the phone officially went on sale on June 29 with the 32 GB variant selling for Rs 27,000 and the 128 GB variant for Rs 37,200.

Last week, HCL Infosystems had announced that it has signed a distributor agreement with Apple for iPhones and other products in India.

Apple CEO Tim Cook last year during his India tour has expressed his desire to capture the potential iPhone market in India. This year, India’s PM Narendra Modi too had met Cook, among many US CEOs and entrepreneurs, while touring the US.