Apple Working On GST Issue With Indian Government

| About: Apple Inc. (AAPL)

Summary

The Indian government and Apple are working to resolve issues with GST.

Both sides are in negotiations and should reach a compromise imminently.

Seems like Apple's manufacturing plant in India will be a go shortly.

Over the weekend, Ajay Kumar, the Secretary of the Indian Ministry of Electronics and IT said, "We are supportive of Apple's proposal (to manufacture in India)," even though a final decision is pending. Beyond devices, Apple Pay will also tie in well with India's move gradually shifting to a less cash economy.

India will soon start to implement a goods and services tax (NYSEMKT:GST) and Apple is seeking a 15 year exemption on duties on imported components which might require a tweaking of the proposed GST structure currently drafted.

The Department of Industrial Policy and Promotion stated that they will negotiate a way by tweaking existing GST policy which will not be Apple-specific but will apply to the industry as a whole.

Ajay Kumar added that "We have not reached any decision yet on Apple's demands. But we are hopeful about the discussions that are going on," he said.

Two years ago, Apple had entered into negotiations with the Indian government to set up a manufacturing base in India but were unable to come to an agreement. In fact, India has made significant advancements in its own technological prowess and now offers ample skill-based manpower for companies like Foxconn and Wistron that will be Apple's partners in India.

So get ready for not only Apple iPhones to start making some serious inroads into the immense Indian market but Apple will also be able to aid Prime Minister Modi and the Indian government to make rapid progress in shifting to a cashless economy which is the basis of the demonetisation measures in November 2016.

Could be a win-win for Apple, Apple investors and for the Indian government as well.

Stay tuned.

Disclosure: I am/we are long AAPL.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: long and short options in AAPL

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