Apple seeks 15-year customs duty exemption before setting up India unit

Apple a 15-year Customs duty holiday on import of iPhone kits, new and used capital equipment, and consumables to establish an iPhone production facility in India.

Apple which has been planning to set up a manufacturing unit in Bengaluru has submitted a formidable wish list of prerequisites – the prime being a 15-year Customs duty holiday on import of iPhone kits, new and used capital equipment, and consumables.

The application seeks ‘full duty exemption on manufacturing and repair inputs (raw materials), yield loss on inputs, components, capital equipment (including parts), and consumables for smartphone manufacturing and services/repair for a period of 15 years for both domestic and export markets,’ reports The Indian Express.

Apple said that it does not intend to source components locally and hence has asked for cuts in the duty taxes on various components, completely knocked down (CKD) and semi-knocked down (SKD) units of iPhones that will be assembled in India. The assembly unit is planned to set up in mid-2017.

Commerce Ministry officials said the demanded duty break would require a trade policy change for the entire industry as it would need to be extended to other companies, including Samsung, who have set up phone manufacturing units in India.

Commerce and Industry Minister Nirmala Sitharaman has said the government is yet to take a view on Apple’s demands because no other smartphone manufacturer has yet sought any such demands or concessions.

Commerce and Industry ministry would have to usher another policy level change in the Export Promotion Capital Goods scheme as Apple wants inclusion of “used” capital goods, spare parts and components under the scheme for duty-free imports. The EPCG scheme currently forbids the import of second-hand capital goods or spares.