India not likely to cave to Apple's taxation, import law change demands for manufacturing ...
Apple and India are once again at loggerheads about expanding iPhone manufacture in the company, and the country's taxation authority is not likely to concede to demands for more slack in local part sourcing requirements, a lighter tax burden on imported components, or the call for governmental assistance with capital investment.
According to a report from Reuters on Monday, Apple is looking to add up to 10,000 jobs in India with an expansion to its existing manufacturing base. To do so, Apple is seeking capital equipment incentives, import and export of phones after repairs, as well as the reduction of the part sourcing requirements and taxation in place.
Sources familiar with the matter claim that the India government has told Apple that there would be no exemptions from existing policy, and no breaks on the 10 percent tax on imported parts that it currently assesses. A document prepared by India's information technology ministry claims that the Apple's demands "may not be feasible" to implement.
"Apple wants duty-free imports of components." once source told Reuters. "India wants indigenization."
Manufacturing the iPhone SE and possibly other devices in the future with expansion in India fulfills a number of conditions imposed on Apple as a condition of doing business, along with providing tax breaks. However, the new demands that Apple is making in order to expand manufacturing in the country may pose a problem in the long run -- or may just be a tactic that the government has used in the past of "leaking" information, and essentially negotiating through the press.
Assembly of the iPhone SE at the Karnataka Wistron facility began in mid-May. Officials in the Indian government hope the price for the iPhone SE will be cut in time by as much as $100 compared to the current local price, though Apple is likely to try and avoid too much of a reduction in order to preserve its margins.
The first iPhone SE models built in India by Wistron went on sale in various cities around India in June. The devices are marked "Designed by Apple in California, Assembled in India."
As far as sales channels are concerned, Apple is considering flagship stores in New Delhi, Bangalore, and Mumbai -- all three locations where most of India consumers wealth is centered. This is in addition to the Apple Authorized Reseller expansion that Apple was said to be examining in March.
In response to a question at the most recent Apple earnings conference call, Apple CEO Tim Cook said that there was "great momentum" in India, but Apple was still "gaining understanding" of the market.
According to a report from Reuters on Monday, Apple is looking to add up to 10,000 jobs in India with an expansion to its existing manufacturing base. To do so, Apple is seeking capital equipment incentives, import and export of phones after repairs, as well as the reduction of the part sourcing requirements and taxation in place.
Sources familiar with the matter claim that the India government has told Apple that there would be no exemptions from existing policy, and no breaks on the 10 percent tax on imported parts that it currently assesses. A document prepared by India's information technology ministry claims that the Apple's demands "may not be feasible" to implement.
"Apple wants duty-free imports of components." once source told Reuters. "India wants indigenization."
Manufacturing the iPhone SE and possibly other devices in the future with expansion in India fulfills a number of conditions imposed on Apple as a condition of doing business, along with providing tax breaks. However, the new demands that Apple is making in order to expand manufacturing in the country may pose a problem in the long run -- or may just be a tactic that the government has used in the past of "leaking" information, and essentially negotiating through the press.
Assembly of the iPhone SE at the Karnataka Wistron facility began in mid-May. Officials in the Indian government hope the price for the iPhone SE will be cut in time by as much as $100 compared to the current local price, though Apple is likely to try and avoid too much of a reduction in order to preserve its margins.
The first iPhone SE models built in India by Wistron went on sale in various cities around India in June. The devices are marked "Designed by Apple in California, Assembled in India."
As far as sales channels are concerned, Apple is considering flagship stores in New Delhi, Bangalore, and Mumbai -- all three locations where most of India consumers wealth is centered. This is in addition to the Apple Authorized Reseller expansion that Apple was said to be examining in March.
In response to a question at the most recent Apple earnings conference call, Apple CEO Tim Cook said that there was "great momentum" in India, but Apple was still "gaining understanding" of the market.
Comments
A government is suppose to spend the money it receives from taxes on it's people the way a parent(s) earn money to take care of their family.
Apple as a company has a lot to gain by being in India and it's huge emerging middle class. India has every right to make demands on the richest company in the world so that it's people benefit from such arrangements.
Apple is used to pay max 0,005% on all it earns in the EU.
(After EU started to complain Apple began to move it’s EU-busines’ mailbox office to Jersey)
Apple gladly sell products denpending on all that states has built up with help of collected taxes, but refuses entirely to contribute anything themselves.
Apples attitude towards taxes makes me wanna puke!
Corporations making money & trying to keep what’s theirs through LEGAL means ,makes you sick ?
You must be a sad socialist.
One one hand, Apple has had a history of flaunting loopholes, that while legal, are viewed as opportunist because of how much money Apple has. Tim Cook has spoke that Apple follows not only the letter of the tax law, but also "the spirit" of the law.
Making a deal with India can show that Apple
does, in fact, follow the spirit of the law. It can also mute any claims that Apple is in cahoots with Foxconn in creating "sweatshops", since now Apple would be in India and any claims that they too have sweatshops would show that the issue is a cultural issue and not directly related to Apple.
On on the other hand, India understands that manufacturing Apple products in India that show the same if not better build qualities as an Apple product in China would promote more companies to move from China to India. It would also give Apple more flexibility in manufacturing costs and control secrecy better than it has in China. The problem is India is stubborn enough to sink the deal without negotiating what kind of tax incentives would work for both parties. They are tough when it comes to money.
Honestly speaking I think India needs Apple much more then Apple needs India at the moment. India wants to copy the same blue print that made China the word's manufacturing hub. Especially in the high tech space, and there isn't any other company on earth who is as good as Apple in making this happen.
Of course the terms Apple are asking is quite a lot, but that is how every negotiation start. And both party compromise at the end.
I am a little sceptical if this manufacturing plan will work, competing against China. But I am also not sure what else they could do to create millions of jobs.
The Indian government will negotiate the best deal for the people of its country. I don't understand why they must accept anything Apple proposes. This is no different in the US where cities and states will negotiate with large companies, offering certain limited tax breaks in exchange for commitments from companies looking to establish a presence in that place. India is not being greedy no more that the city council in your city is when a developer wants to use public land for enterprise. The Indian Government is working for its citizens.
I wonder if your education included civics? http://civicseducationinitiative.org
Agree, not sure why so few people here can't see this.
and you don't?