“The most recent Indian budget contained a provision about import tariffs upon mobile phones and their components which was seen as giving Apple a certain privilege in the marketplace,” Tim Worstall writes for Forbes. “Only a couple of weeks later this has been rethought and the differential rates collapsed down to just the one single rate. This is a good move: it accords with the basic ideas of the Washington Consensus.”
“Tariffs aren’t a good idea in themselves, but if you are going to have them then they should be at broadly equivalent rates across close substitutes. To do otherwise will privilege certain business structures above others,” Worstall writes. “And that’s really something that government shouldn’t be trying to do, micromanaging who has preferential access to a market and who does not. It has to be said that Apple’s privilege here was not all that great: but the rethink, the change, is still a welcome removal of a distortion in the market.”
“My own view of course is to have no tariffs on anything at all,” Worstall writes. “But… if there are going to be tariffs though they should be as they are now: general, relatively similar, and not tipping the market to privilege one particular method of production or producer. It’s fair enough for government to set general goals if that’s the way the people want it done. But trying to micromanage the process will always end in something between inefficiency and disaster.”
Read more in the full article here.
MacDailyNews Take: As Worstall points out, “The point being that what India is trying to do is gain some portion of that Chinese mobile [phone assembly] business.”
The less dependent Apple is on China for product assembly, the better.
Brazil, India, wherever. Spread out the assembly points (which might even end up benefitting on shipping costs eventually). It’s the matter of not putting all of your eggs in one basket, which we’re absolutely sure Tim Cook understands perfectly well.
India rejects Apple’s plan to import and sell refurbished iPhones – May 3, 2016
Indian government panel paves way for wholly-owned Apple retail stores in India – April 28, 2016