Apparently, India might not agree to the request by Apple to defer its decision on tax policies for mobile-phone parts.
The mobile phone giant Apple Inc. has been trying to convince the Indian government for better incentives – taxes and others – to expand its manufacturing capabilities in India, Reuters reported.
The company wants the Indian government to delay its plans to levy taxes on imported mobile parts. Although the government wants the company to expand in India, it is unwilling to compromise on its tax policies which are intended to give a boost to the domestic manufacturing sector.
“Apple wants duty-free imports of components. India wants indigenization,” according to sources, Reuters reported. The write-up mentioned that neither Apple nor the government responded to the request for comments on the development.
Promoting its ‘Make in India’ agenda, India has put a 10 percent tax on phone components such as chargers, batteries, and headsets that are imported. “Under a phased manufacturing programme (PMP), the government plans to extend the taxes to more components as a way of nudging parts makers to switch to more local productions,” the article read.
Even though the government has not denied the demand publicly, sources in the knowledge of the talks told Reuters that it will not give special incentives to Apple. “We have told them, please come and invest but we cannot do things that go beyond our policies. We cannot do things only for you,” a senior government official said. “They are coming around (to our view).”
The smart-phone company has conveyed to the government that it would be able to generate 5,000-10,000 jobs in India when it expands in India.