The Apple logo hangs over the entrance of one of its stores in New York. Photo: AFP
The Apple logo hangs over the entrance of one of its stores in New York. Photo: AFP

After facing a setback in the China market, iPhone maker Apple is keen to boost its presence in India, the world’s second largest and fastest growing smartphone market.

Apple on January 4 cut its quarterly sales forecast, blaming its poor performance on trade tensions between China and the US, as well as the economic slowdown in China. For Apple, China has been a key market for sales and a manufacturing hub for the bulk of the iconic products it sells worldwide.

The Cupertino-based IT giant is now warming up to India as a manufacturing and retail hub and Indian Commerce Minister Suresh Prabhu is expected to meet Apple executives on the sidelines of the World Economic Summit at Davos, Business Standard reports.

Early last year talks between Apple and the Indian government broke down over a host of concessions sought by the US smartphone maker in order to set up a manufacturing unit.

It wanted an exemption on duties on manufacturing and repair units, components, capital equipment and consumables for smartphone manufacturing for a period of 15 years. The company also sought a relaxation on the mandated 30% local sourcing of components, as well as a reduction in customs levies on completely-knocked-down units of devices.

The Indian government rejected most of these demands. As part of its ‘Make In India’ plan the government wants to encourage local manufacturing by imposing stiff duties on imported devices and parts.

Due to this policy South Korean smartphone maker Samsung set up a factory at Noida, near New Delhi, with an eye to make it an export hub, while Chinese handset maker Xiaomi manufactures its products for the Indian market in a plant set up by Foxconn in Chennai. This leaves Apple phones pricey, as they have to factor in the steep import duties.

Apple has been assembling the low-cost SE and 6S models in India through Taiwanese contract manufacturer Wistron Corp’s local unit in Bangalore. But it has now firmed up plans with Foxconn to assemble high-end models in India.

In the forthcoming meeting between Apple and the Indian government there is a possibility of reaching some middle ground to get this happening.

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