Apple seeks tax breaks for suppliers to build iPhones from scratch in India

A limited run of “Assembled in India” iPhone SE models is now rolling from the assembly lines in India, run by Apple’s contract manufacturer Wistron, but the Cupertino technology giant is now seeking extend tax breaks for its suppliers to build iPhones in the country from scratch.

According to Reuters this morning, government officials said that meeting Apple’s request would require a new policy that would need to apply “fairly” to other device makers, too.

Apple CEO Tim Cook and Indian officials have reportedly been in talks since May of last year to set up a production base for iPhones in India that goes beyond just assembling the devices.

A list of prerequisites that Apple submitted to the Indian government in October reportedly includes duty exemption on raw materials for manufacturing components and capital equipment for 15 years for its suppliers to make iPhones from scratch in India.

A government official said:

My view is that India needs to support Apple to create an ecosystem, which was done for the car maker Maruti. This helped to build the automobile and auto component industry in India. Initial support will pay rich dividends in the long run and facilitate innovation, design and manufacturing of electronics components in India.

A top official told the news organization that Apple has told the Indian government that it would be bringing in “a host of these ancillary units when it sets up operations”. What Apple is basically asking for is the same treatment for its suppliers, like the tax concessions.

“They want everything,” added the official.

The Indian market is the world’s third largest for smartphones behind the US and China.