Mumbai: In India, the world’s second-biggest smartphone market, Apple Inc’s normally deft management of government relations is being put to a fresh high-stakes test.
For almost two years, Apple has battled India’s telecom regulator over a demand that it allow the use of the government’s anti-spam app. Non-compliance, the watchdog threatened last month, could result in phones being “derecognised” from the country’s networks, meaning they would no longer function.
It is just one of several headaches the Cupertino, California-based company is nursing in India – a market it calls a top priority but where it has just 1 per cent share.
Apple has not gotten the tax breaks it has sought for suppliers to expand local manufacturing – key if it is to avoid steep import duties that have made its iPhones, already pricey for many Indian consumers, even more expensive.
The lack of direct sales channels has helped make it vulnerable to discounting and prompted it to recently embark on a major overhaul of its retail strategy.
TAXES AND DISCOUNTS
- Apple has also failed to find favour with PM Narendra Modi’s administration when it comes to tariffs. Championing policies that force overseas tech firms to manufacture locally, the govt has imposed import duties.
- A base model iPhoneX is now priced at nearly $1,400 in India – some 40% more than in the US.
- Apple, which currently assembles only two low-end iPhones in India, has said tariff-free imports are critical for smartphone component suppliers and essential to make local manufacturing practical.
- But its pleas have gone unheeded and its competitors are not making same arguments.
- The steep tariffs are exacerbating sales woes for Apple in India.
(With inputs from Reuters)