Apple gets key win as India allows foreign firms to fund equipment without tax risk

India Breakthrough

On Sunday, India's government gave a key win to Apple by allowing foreign companies to provide machines to their contract manufacturers in certain areas for five years without tax risk.

Apple had been lobbying the Indian government to revise its income tax laws to ensure the company is not taxed for ownership of the high-end iPhone machinery it provides to its contract manufacturers, Reuters reported.

The move could prompt Apple and other companies to invest swiftly in the electronics manufacturing space by taking over initial expenses for pricey machines, cutting the initial cost burden on contract manufacturers they collaborate with, according to the report.

"We are saying that if you bring your machine, and that machine is used by a local manufacturer to produce something, we will … exempt you for five years. We are giving them certainty," said Revenue Secretary Arvind Shrivastava at a post-budget press conference, the report added.

NB: This is huge. Apple depends on It will open the floodgates for Indian production. Apple uses investment in supplier equipment/tooling to accelerate supplier responsiveness and to create leverage in the supply chain. See also my post "Margin Call. "

Via SeekingAlpha Read the original article →