Apple seeks tax breaks for suppliers to make iPhones in India

“Apple Inc. has asked the Indian government to extend tax breaks to its suppliers if India seeks to become a manufacturing hub for iPhones and its components,” Sanjeev Miglani and Paritosh Bansal report for Reuters. “Government officials say meeting this request would require a new policy that applies fairly to other device makers, too.”

“The two sides have been discussing a list of ‘prerequisites’ that Apple submitted in October, including duty exemption on raw materials for manufacturing components and capital equipment for 15 years for it to make iPhones from scratch in India,” Miglani and Bansal report. “The demand could further delay Apple’s plans to penetrate the Indian market, the world’s third largest for smartphones behind the United States and China, but where it has only a 2 percent share.”

“In May, Apple, working with Taiwanese contract manufacturer Winstron, began assembling the iPhone SE in Bengaluru,” Miglani and Bansal report. “For India, which would only be the second iPhone production center after China, such an investment would be a big win for [Prime Minister Narendra] Modi’s Make-in-India campaign. It would also spawn a vast network of suppliers, in the way that India’s auto ancillary sector took off to feed Maruti Suzuki India’s production line over three decades ago.”

Read more in the full article here.

MacDailyNews Take: India should accommodate Apple suppliers as the benefits far outweigh any tax breaks (jobs, other taxes such as income, sales, etc., and ancillary businesses that cater to the suppliers and to the suppliers’ employees (real estate, grocery stores, restaurants, home goods, etc. – all of which also pay taxes).

[Thanks to MacDailyNews Readers “Fred Mertz” and “Dan K.” for the heads up.]

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