Apple to start India manufacturing in coming months with iPhone SE: Report

Apple's move comes as it seeks to boost its share in the world's fastest growing major mobile market

Apple Inc will in the coming months start assembling its lower-priced iPhone SE models at a contract manufacturer's plant in the technology hub of Bengaluru, an industry source with direct knowledge of the matter said on Friday.

Apple's Taiwanese manufacturing partner Wistron Corp is setting up a plant in Bengaluru to focus solely on assembling iPhones, a separate source told Reuters earlier this month.

Apple's move comes as it seeks to boost its share in the world's fastest growing major mobile market, where handsets far cheaper than Apple's iPhones dominate. It also comes as smartphone sales growth is slowing in Asia's other massive market, China.

To lower prices, Apple has been seeking to set up local production and has been in talks with the Indian federal government regarding issues such as tax concessions.

The industry source told Reuters the initial manufacturing of the iPhone SE model was not contingent on those concessions.

Apple did not immediately respond to a request for comment.

The Economic Times newspaper earlier on Friday reported Apple planned to initially assemble 300,000 to 400,000 iPhone SE handsets in India. The industry source told Reuters the numbers would be substantially lower to begin with.

The source also said it was too early to say what other phone models Apple would assemble at the Bengaluru plant. Read more

Flipkart opposes entry tax by states: Why it is a fight to the finish

The products you buy online are likely to get costlier if state governments have their way. Uttarakhand government has imposed an entry tax of 10 per cent on goods purchased from e-commerce firms. Bihar and Assam have already imposedan entry tax, which is now likely to be imposed by several other states.

An entry tax is a tax that a state government imposes on goods coming in from other states.

Naturally the e-commerce industry is crying foul as it increases the cost of the goods for its customer. Flipkart has already moved the Uttarakhand High Court (HC) against the 10 per cent entry tax. In a petition filed with the court in February, Flipkart argued that the state’s move to impose such a high entry tax was discriminatory.

This is a classic case of fight between two parties, both claiming to be victims.

It is an established fact that aggressive pricing by e-commerce companies has not only hurt the brick and mortar retail setup but has also affected the companies themselves who follow such predatory pricing. Most of the e-commerce companies operating in India are making losses as they fight for market share under-pricing each other, in many cases below the cost of purchase. In the process the mom-and-pop retailer shop, are also taking a hit. Madhya Pradesh’s finance minister is on record saying that 20-30 per cent of the state’s commerce has shifted online.

From the e-tailers point of view, imposition of entry tax is an additional barrier and goes against the spirit of free access to market. It is a case of the honest taxpayer getting taxed twice. Taxes are imposed at the point of sale and then again when it enters a new state (entry tax). E-tailers are complaining against this double taxation which is increasing the cost of goods for the final customer.

State governments have a point when they say that e-commerce companies have impacted their tax collections. Sales tax revenue has fallen as shops in the states have either closed down or have posted lower sales. These governments want their pound of flesh in tax collection from the goods that are sold in their state without paying any taxes as well as want to protect their local industry, which in many non-producing states are these small retailers.

We can draw a parallel between the actions of the state governments with that of the centre who decided to impose high level of taxes (import duties) on steel imports. Cheap steel was destroying the domestic industry leading to closure and loss of jobs. Similarly cheap goods from e-commerce companies who have the benefit of bulk purchase and are not the manufacturers themselves, has been destroying the state’s industry, employment and government’s revenue. In order to safeguard these, the entry tax seems to be a solution, however crude it may appear.

Markets likely to remain volatile, Railway Budget eyed

Stock markets are likely to see volatile trading sessions this week amid derivatives expiry, with all eyes set on two key events -- Railway Budget and Economic Surveyreport, say experts.
"Trend in global markets, crude oil prices, Economic Survey, reform measures announcement in upcoming Railway Budget and rupee-dollar movement will dictate trend on the bourses. Indices may remain volatile with positive bias ahead of expiry of February series derivative contract in the week ahead," said Gaurav Jain, Director, Hem Securities.