India won’t give in to Apple’s tax break demands

India Apple wants to dramatically improve
its 2 percent share on the smartphone market in India.
Photo: Tim Cook/Twitter

Apple’s goal of snagging a sizable piece of the growing
smartphone market in India may prove more expensive than hoped.

India’s Department of Revenue rebuffed
Cupertino’s requests for 15 years’ worth of tax concessions to
set up manufacturing facilities, according to published reports.
The bad news comes a month before Apple is set to begin building
the iPhone SE in that country.

To
sell iPhones in India, Apple must figure out how to bring down
the prices of its products in a country where low annual
incomes make them too expensive for the average person. Apple
negotiated with government officials to set up manufacturing as
a way to cut the duty it currently pays to import devices into
the country.

Apple
operates no retail outlets in India, so must sell its products
through distributors. To build more of a presence, Indian
officials insisted that Apple invest heavily in the country. In
addition to tax breaks, Apple asked the government to ease
mandates on local sourcing of components.


Apple
presented detailed plans and pitched its request for tax breaks
to India’s Department of Electronics and Information
Technology, which then forwarded the information to revenue
officials.

There’s
no word whether negotiations continue or if Apple’s first
factory in India is still on track to start assembling iPhone
SE handsets in April.

Apple
is not likely to pull the plug in one of the few markets where
smartphone sales are still on a meteoric rise. The iPhone
represents 70 percent of Apple’s profits, and India is
projected to sell
some 750 million smartphones
by the end of the decade.
Currently, Apple can claim just 2 percent of the market share.

Source:
iPhone Hacks



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