The Indian government has decided to raise taxes on the import of electronic items like phones and TVs, hurting Apple’s business in the country. Over 88% of its products are brought in from overseas and are already extremely expensive.
Things might get dearer now that the import tax has risen from 10% to 15%. The administration is hoping the move curbs supplies from abroad and encourages more local manufacturing. Its Make in India scheme has shown a great deal of success when it comes to electronics, leading to 8 out of every 10 handsets sold in 2017 being made domestically.
Apple has actually hopped on the Make in India movement, but only for the iPhone SE. It’ll now be forced to deal with the fallout of the import tax. As reported by Reuters, it can either opt to increase iPhone rates or produce more devices in the nation.
The first option is a bad idea given that its revenue in India has already slowed down this year. An increase in costs won’t help matters when a majority of the country uses affordable Android phones. The second one could be feasible, but Apple and the government have been at loggerheads for months now regarding this.
Apple has apparently been asking the administration for tax breaks and incentives to expand its manufacturing footprint, but the government is not willing to give it any concessions. Perhaps the looming threat of import taxes will change the Cupertino-based company’s heart.
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There has been talk of an iPhone SE 2 in the works at Apple supplier Wistron’s base in India. Rumor has it that the device will get launched in the first half of 2018. The brand may just price it lower than usual since it won’t have to pay a 15% import tax on the smartphone.