Apple wants tax breaks for its suppliers for making iPhones in India

Apple has asked the government of India to extend tax breaks to its suppliers if the country wants to become a manufacturing hub for iPhones and its components, reports Reuters.

Government officials say meeting this request would require a new policy that applies fairly to other device makers, too. Apple has been in talks with Indian officials since May of last year, when CEO Tim Cook and Prime Minister Narendra Modi agreed to set up a production base in the country that goes beyond just assembling the devices, as happens today.

According Reuters, the two sides have been discussing a list of "prerequisites" that Apple submitted in October, including duty exemption on raw materials for manufacturing components and capital equipment for 15 years for it to make iPhones from scratch in India.

The tech giant also wants the government of India to relax labelling rules so that it doesn't have to print product-related information directly onto devices to avoid cluttering up their minimalist design, according to The Economic Times. That's one of the concessions Apple has sought after expressing its intention to start manufacturing in India, the article adds, quoting an unnamed official. 

The Department of Industrial Policy and Promotion (DIPP) forwarded the Cupertino, California-based company’s request to the Department of Revenue and Department of Electronics and Information Technology in November for consideration, said another official. Apple has also sought tax incentives that are being examined by the finance ministry. The India government currently provides subsidies for investments in special economic zones in order to attract investors.

However, the country’s finance ministry rejected an earlier proposal by Apple to set up wholly owned outlets in the country that sought exemption from the compulsory 30% local sourcing norm. The company had sought the exemption on the grounds that it was bringing “state-of-the-art” and “cutting-edge technology,” making it difficult to meet the sourcing condition.