Apple is working on a deal to manufacture some of its products in India, according to a senior government official speaking to The Wall Street Journal. Apple is asking for tax and tariff incentives in exchange for bringing its business into the country; in particular it wants a 15-year tax holiday on all of its imports into the country. The official said that most of Apple's requests were "workable" and that it is "almost a done deal."
Much of Apple's growth in 2014 and 2015 was driven by the company's expansion into China, a relatively untapped market that was eager to buy its products. After a slow 2016, Apple could use the growth that expanding into another new market could provide. In Q3 of 2016, IDC estimates that the Indian smartphone market grew about 11 percent year-over-year, while the worldwide smartphone market grew only one percent year-over-year.
Part of the reason Apple has had trouble cracking the Indian smartphone market is that many low-cost competitors are already entrenched; the government's "Make in India" program also favors smartphone companies that manufacture their products locally. It was reported last year that Apple had been denied permission to sell refurbished iPhones in the country, but Apple is still working to open retail stores in India, and manufacturing products locally could make the Indian government more receptive to its requests.