Apple sticks to concessions stance, wants to assemble iPhones in India

Senior tech giant executives present case of making state-of-the-art devices to govt panel

Senior officials from Apple on Wednesday assured an inter-ministerial panel of their intentions to set up manufacturing units in the country, provided their demands for concessions were met.

While the government is yet to take a call on the company’s proposal, it is examining the list of concession demands, said a senior government official, who did not want to be named.

Officials from the revenue department, Department of Industrial Policy and Promotion (DIPP) as well as from the Union ministries of electronics and information technology and environment met Apple officials. 

Priya Balasubramaniam, senior vice-president, operations, led the Apple team. The tech giant, which has its headquarters in Cupertino, California, US, has asked for several several fiscal and other concessions, such as exemption from mandatory local sourcing of products and waiving of duty on import of components. After arguing that it makes state-of-the-art and cutting-edge technology products for which local sourcing was not possible, the company had earlier also asked for the “creation of a suitable ecosystem”, another official said. 

The company said it appreciated the open and constructive dialogue with Indian officials. “We’ve been working hard to develop our operations in India,” Apple said in a brief statement. “We appreciate the constructive and open dialogue we’ve had with government about further expanding our local operations.”

However, ministries on the panel have registered their disapproval with the DIPP over Apple receiving any special treatment. They have warned that this could create an unfair playing field or give rise to demands by other companies for retroactive measures by the government.

“The government is planning to set down specific parameters for companies hoping to secure concessions such as tax breaks on their investments in the country,” a senior official in one of the ministries in the panel told Business Standard.

The parameters currently under consideration are the amount of investment, the number of jobs created, as well the earlier established norm of rewarding companies bringing in state of the art technology. “The ministries will continue to send their feedback to the DIPP. The panel could meet again,” the official said.

Apple is keen to assemble its signature iPhones in India, one fastest growing smartphone markets in the world, but there the global company has only a tiny market share. Most Apple products are assembled in China, usually by Foxconn Technology, an original device manufacturer. According to reports, the Taiwan-based Winstron Corporation has initiated plans to start assembling Apple phones in Bengaluru.