India’s government will likely decline to give Apple the exemptions and tax incentives it has demanded in exchange for building iPhones in the country, according to statements by its trade minister. It’s the latest setback in Apple’s long and arduous journey to expand its presence in the world’s second largest nation and fastest growing smartphone market.
Earlier last year, Apple, which makes most of its products in China, had its application to open stores in India rejected due to rules requiring at least 30% of its components to be built locally, according to Bloomberg. Apple asked for a permanent exemption to this rule, which was subsequently rejected by the finance ministry. Then, in November, Cupertino sent a written request for tax concessions on iPhones built in India, including lower manufacturing and import duties.
Now, Reuters reports that the Indian government seems reluctant to accept the US tech company’s petition for special tax treatment. Indian trade minister Nirmala Sitharaman has said that if any exemptions were to be offered, they would likely apply uniformly to all smartphone manufacturers and not particularly to Apple. A program of incentives and subsidies already exists in India for tech manufacturers, ranging from capital subsidies for companies with local manufacturing operations to tax incentives for investments in special economic zones. It’s uncertain whether the nation has plans to expand these in the near future.
Apple manufacturer Winstron reportedly has plans to build a plant in Bangalore, India, whereas longtime collaborator Foxconn already has a group of facilities located throughout India. However, Foxconn intends to use its Indian plants to build smartphones for Xiaomi, and it’s uncertain whether some will be repurposed for Apple.