(Reuters) – Apple is at loggerheads with India over a bid to defer a rise in import taxes on mobile phone parts so it can expand iPhone manufacturing in the country.
The world’s biggest company has been in talks with Indian officials for months, seeking government tax breaks for expanding operations in one of the world’s fastest-growing smartphone markets.
Apple wants India to defer an existing policy to levy taxes on imported mobile components in line with Prime Minister Narendra Modi’s ‘Make in India’ drive to boost domestic manufacturing.
No policy exemptions
While India’s government has been keen to get Apple to manufacture in India as a showpiece investment, it has told the US firm there would be no policy exemptions, so there will be no tax breaks on parts imports, according to sources.
“Apple wants duty-free imports of components. India wants indigenisation,” said one person with direct knowledge of the talks.
Apple has expressed willingness to include locally-made components over time, but has stuck to its demand for immediate import tax relief to expand its iPhone manufacturing, the person added.