Indian government offers Apple tax incentives to boost local iPhone production

India has offered tax concessions to Apple to expand iPhone production in the country just days after it was announced that the Cupertino giant kicked off local iPhone SE production.

This is part of Prime Minister Narendra Modi’s plans to boost local manufacturing.

Ravi Shankar Prasad, the central minister for Electronics and IT, told Reuters this morning that Apple has already approached the Indian government regarding potential expansion of its manufacturing facility in the southern Indian technology hub of Bengaluru, operated by its Taiwanese supplier Wistron which as of recently has been assembling iPhone SE there.

According to the news gathering organization, the Indian government has offered to permit Apple to import handset components intended for use in local manufacturing tax free.

Here’s an excerpt from the article:

Among a set of tax concessions, Apple had initially sought a 15-years tax holiday for all components that it would import for setting up a manufacturing facility in India.

A panel of ministries rejected that demand and has offered a phased program to increase the share of local production in the manufacturing, Aruna Sundararajan, Secretary at the Ministry of Electronics and IT said.

“We have offered them tax exemptions on those components which could not be manufactured in India,” Sundararajan told Reuters.

Local manufacturing component would have to be increased gradually, he added.

The tax concessions will be subject to the condition of increasing local value addition over a period of time, to which Apple has reportedly agreed to.

“It will be a little early to say that India and Apple have agreed on the common ground,“ cautioned a government official.

It’s been speculated that Apple and Wistron began making iPhone SE in India as a way to lower the handset’s price point in order to make it more affordable to Indian consumers.