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Apple to begin manufacturing iPhones in India without tax breaks

Apple to begin manufacturing iPhones in India without tax breaks

Apple is set to begin trialling smartphone production in India from May without waiting for a governmental response to its tax concessions plea.

The US device giant struck a deal in February with manufacturer Wistron to begin assembling more affordable iPhone models in India at a newly established factory in Bengaluru (Bangalore), India’s technology centre.

While the firm put in a request for tax concessions with the Indian government at the time, it seemed intent to commence production regardless. That said, reports have indicated that the Bengaluru facility will be a pilot project for Apple, with its requested tax breaks a key factor in its Indian manufacturing business going forward.

Apple’s demands for tax breaks were initially posited as a prerequisite for it commencing production in India, with the firm asking for a 15-year waiver on custom duties for importing all components and equipment. It also asked to be exempt from India’s 30% local sourcing requirement.

However, these demands were denied by India’s Department of Revenue in March, with Indian officials stating that no one firm should be able to attain such preferential treatment. However, the government is looking to revise its manufacturing policy to better support its “Make in India” campaign, as well as draw in foreign investment.

A state official for Karnataka noted: “We are working to see that [Apple] brings its entire component making ecosystem to Bengaluru and begins to export from here. We are not much concerned about Apple making iPhones for the domestic market, which will happen anyway.”