Apple is lobbying India’s government to modify its income tax law to ensure the tech giant isn’t taxed for ownership of high-end iPhone machinery it provides to its contract manufacturers, reports Reuters.
This is seen as an issue seen as a hurdle to its future expansion. The push coincides with Apple’s growing India presence as it diversifies beyond China, notes Reuters.
From the report: Experts say Apple potentially faces billions of dollars in additional taxes if it changes its business practices without convincing New Delhi to change a 1961 law covering foreign ownership of equipment used in India.
In China, Apple procures the machines used to make iPhones and gives them to its contract manufacturers, and is not subject to tax even though it still owns them.
In September it was announced by The Economic Times that Apple has expanded its supply chain in India to nearly 45 companies. This includes local component makers and those who make up the subassembly ecosystem of the iPhone maker, the article says, quoting unnamed “officials familiar with the matter.” These component suppliers have so far created about 350,000 jobs, including 120,000 direct jobs, they said.
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