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

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Tim-Cook-IndiaFollowing 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.

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Tags: India, Wistron

Top Rated Comments

RickeshPatel Avatar
53 months ago

No wonder why. Even Apple's cheaper phones are pretty expensive for a very poor population.

When there are so many other cheaper phones that can do much of what expensive iPhones can do, it is hard for Apple to compete.

The population in total actually isn't as poor. The income gap is wider but there's still a large percentage of the population that can afford the things we do in America. India's economy is now larger than the U.K's by the way.
Score: 6 Votes (Like | Disagree)
69650 Avatar
53 months ago
The richest company in the world wants tax concessions from one of the poorest countries in the world where children sleep on the streets. Cook has absolutely no sense of social responsibility.
Score: 3 Votes (Like | Disagree)
konqueror4u Avatar
53 months ago

I didn't mean everyone in India is poor. But, it is a very poor country.

Also, comparing the UK economy to India isn't exactly a good comparison. I think India has like 20 times the amount of people that the UK has. Maybe more.

My wife is Indian, and we talk about visiting India every once in a while. The way she talks, the middle class of India would be like living in poverty here in the US.

Yes, not everyone is like that, and it is getting better over time. But, I don't think Apple has much of a chance to have a large market share of India, unless they have a much cheaper phone. Also, many of the feature of the iPhone do not work in India.

Right now apple sells $650 iPhone at $1000 in India. I think it can increase its market share for sure if it can price it at $650. India is the worlds fastest growing major economy.
[doublepost=1483132328][/doublepost]

In America, even people in the ghetto have iPhones...

In India there are no two year contracts or upgrade plans like US. If people were asked to pay the full price of iPhone with out installments I think situation will be no different.
Score: 3 Votes (Like | Disagree)
vertical smile Avatar
53 months ago

The population in total actually isn't as poor. The income gap is wider but there's still a large percentage of the population that can afford the things we do in America. India's economy is now larger than the U.K's by the way.

I didn't mean everyone in India is poor. But, it is a very poor country.

Also, comparing the UK economy to India isn't exactly a good comparison. I think India has like 20 times the amount of people that the UK has. Maybe more.

My wife is Indian, and we talk about visiting India every once in a while. The way she talks, the middle class of India would be like living in poverty here in the US.

Yes, not everyone is like that, and it is getting better over time. But, I don't think Apple has much of a chance to have a large market share of India, unless they have a much cheaper phone. Also, many of the feature of the iPhone do not work in India.
Score: 2 Votes (Like | Disagree)
d5aqoëp Avatar
53 months ago

I think the whole point of manufacturing in India is to lower the prices and attract more customers into its ecosystem.

Wrong. The whole point of manufacturing in India is to keep the prices same and increase their margins.
Score: 2 Votes (Like | Disagree)
kstotlani Avatar
53 months ago

Apple should bring manufacturing back to America... If other countries want our products they should pay more than Americans are paying..

And they do.
Score: 2 Votes (Like | Disagree)

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