Apple Looks To Boost China, India Investment Despite Trump Pressure

Smartphone giant Apple is making moves to expand its investment in China and India despite increasing pressure on the company to increase its domestic US manufacturing and cut its dependance on its Asian partners. Apple chief Tim Cook committed to increasing the iPhone-maker’s investment in China during a meeting with the country’s industry minister in Beijing on Wednesday. Separately, the company has also been lobbying the Indian government to modify its income tax law to ensure the company is not taxed for ownership of any high-end iPhone machinery it provides to its contract manufacturers, citing it as a key hurdle to its expansion in the country. The moves come at a time when US President Donald Trump has maintained an aggressive stance in his trade and tariff war with both China and India. In May this year, Trump also explicitly told Cook he didn’t want Apple to build in India. Still the tech giant, which has also made investment pledges to Washington, has so far managed to be relatively unscathed by the US trade war with both countries. In July, India overtook China to become the top exporter of smartphones to the United States. That shift was primarily driven by a push by the company to shift some manufacturing capacity to India. Apple has, so far, largely relied on suppliers and factories in China where most of its iPhones are assembled. China still a priority On Wednesday, Cook told China’s industry minister Li Lecheng the iPhone maker will keep investing in China, the Chinese ministry said, although the summary gave no details of the size of the projected investment. According to the ministry statement, Li told Cook that China hopes Apple will continue to explore the Chinese market and grow together with Chinese suppliers. China would continue to foster a good business environment for foreign companies, including Apple, he added. That would be good news for Apple considering Beijing has curbed market access to key US companies such as Nvidia and Qualcomm in retaliation to Trump’s trade war. Meanwhile, a Shanghai-based government affairs consultant, who requested anonymity because he was not authorised to speak with media, said US companies are wary of angering Trump by appearing too pro-China. At the same time, they are seeking to avoid appearing insincere in Beijing where they have pledged to be “in China, for China,” he added. When Cook visited China in March, Apple made public its plans for a new clean energy fund there worth 720 million yuan ($101 million). On Tuesday, Apple’s COO Sabih Khan also visited China’s Lens Technology which produces glass covers for Apple products including the iPhone and Apple Watch. As part of his visit to China this week, meanwhile, Cook visited Apple’s store in Shanghai and met Chinese game developers and the designer of the popular Labubu dolls, he said in posts on China’s X-like Weibo. China’s ambassador to the US, Xie Feng, said at a Washington event this week that the business community had “always been a stabiliser of China-US relations and a promoter of pragmatic cooperation.” Many US companies have “chosen China” and are benefiting both countries, Xie added. Tax hurdles in India China’s neighbour India has also become a key market for Apple. Counterpoint Research says iPhone’s share in the Indian market has doubled to 8% since 2022. And while China still accounts for 75% of global iPhone shipments, India’s share has quadrupled to 25% since 2022. Apple’s contract manufacturers Foxconn and Tata have, over the years, invested more than $5 billion to open five plants, but millions of those expenses go into acquiring pricey machines for iPhone assembly. 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. But that’s not possible in India as the Income Tax Act would consider such ownership by Apple as a so-called “business connection”, making the US firm’s iPhone profits liable for Indian taxes. Government and industry sources told Reuters that Apple executives have held talks with the Indian officials in recent months to tweak the law. “Contract manufacturers cannot put up money beyond a point,” one industry source said. “If the legacy law is changed, it will become easy for Apple to expand … India can become more competitive globally.” India cautiously reviewing Apple request For Indian Prime Minister Narendra Modi, smartphone manufacturing is a key plank of his agenda to project India as a global manufacturing hub. India’s deputy IT minister last year said privately that China and Vietnam could race ahead as major smartphone export hubs due to their lower tariffs on phone parts. A senior Indian official said “discussions on taxation rules impacting Apple are ongoing”, but New Delhi is cautious as any changes to the law could diminish its sovereign right to tax a foreign company. “It’s a tough call,” said the official, who highlighted that Apple’s increased investments are equally important. “India needs investments. We have to find a solution,” the official added. The India Cellular & Electronics Association (ICEA), which backs Apple, has in a confidential representation to the government called for changes to the tax law, saying the levy certainty is “paramount for businesses seeking to expand and scale.” “Typical CMs (contract manufacturers) are unable or unwilling to invest in such large quantities of specialised equipment … The cost of the equipment can rise to billions of dollars,” ICEA said, without naming any company.

Apple Looks To Boost China, India Investment Despite Trump Pressure

Інші новини компанії