Make in Bengaluru: Govt won't give in to Apple's demands?

The latest twist comes in the form of the Department of Revenue declining the US company's tax incentive demand. The Department of Revenue has said no to the tax incentive demand of US-based iPhone maker Apple, which wants to set up a manufacturing unit in the country. Sources said the demand of the technology major was sent by the Department of Industrial Policy and Promotion (DIPP) to its revenue counterpart.

In January, Apple executives had met government officials wto put forth their key demands including Countervailing duties (CVD) exemption. Apple is looking for the government's assurance on the CVD exemption to continue for the next 15 years. It fears that in the future to push domestic manufacturing, it may impose countervailing duties. 

In a communication to the government, the Cupertino-based technology major has asked for incentives from the Department of Revenue and Department of Electronics and Information Technology (DeITy). Besides exemption from the Customs duty on imports of components and equipment for 15 years, Apple wants relaxation in the mandated 30 percent local sourcing of components.

Apple executives had made a detailed presentation to an inter-ministerial group headed by Department of Industrial Policy and Promotion Secretary Ramesh Abhishek on its road map for setting up a manufacturing unit in India. With sales tapering in the US and China, Apple is eyeing India - the fastest-growing smartphone market in the world - and looking to set up a local manufacturing unit to cut costs. It, however, does not manufacture devices on its own and rather does it through contract manufacturers.

This has been increasingly clear as Tim cook, unlike before, mentions India in the earnings call. He had earlier said that we are exactly where China was 5-6 years ago. He also visited India and started his day with a visit to the Siddhivinayak temple in Mumbai. Then we've been also hearing about Apple's mapping unit in Hyderabad, and the office space leased in Bengaluru. 

The company sells its products through Apple-owned retail stores in countries like China, Germany, the US, the UK and France, among others. It has no wholly-owned store in India and sells its products through distributors such as Redington and Ingram Micro.
 

With input from PTI

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