Why Apple Rejected to Open its Unit in India?

Indian Trade Minister Suresh Prabhu and few other government officials have recently shown interest in starting manufacturing unit for Apple iPhone and iPad in India.

India is a hub for smart phones and is one of the leading countries with people of maximum usage of smart phones. Many international mobile phone companies have manufacturing units set-up here.

India was keen to have one such manufacturing unit for Apple to produce its products here. But the plan could not be worked out and the reason behind was said to be the demands from the later side.

Apple wanted to have exemptions on excise duty along with other taxes and incentives. It said the parts it uses are genuine and expensive. They need to be imported from out of India so exemption to be given on them.

Indian government rejected the demands saying it can not change its taxes and policies for the sake of one company only, as it would be a violation of an integrated policy under Make-in-India.

Is Government Decision on Apple Manufacturing Unit is Correct?

We believe that Indian government and Apple Inc. need to sit together to come out with some solid decision. If Apple opens its manufacturing unit in India, it would be good for both. Apple wants to have exemption on taxes along with incentives, while Indian government does not want to change the policies for one company.

When someone from India buys an iPhone or Apple’s product, he has to pay 12% excise duty. This will cut to just 1% if Apple products are produced locally in the country.  Also, Apple should also realize that India is one of the biggest countries of smart phones users. So, this is in favor of the Indian customers also if Apple manufacturing unit is set-up here.