The Wall Street Journal reports (Paid subscription required) that according to a senior government official, Apple is nearing a deal to manufacture its products locally in India.  Apple Logo

India is expected to overtake the United States as the globe’s second-largest market after China, and thus such a move is a big deal for Apple and India’s government.

The report indicates that a group of Apple executives have been meeting with government officials this week to hammer out terms. Specific requests are noted as including concessions related to tax and tariff exemptions, including a 15-year tax holiday on imports of components and equipment.

That alone would imply that localized manufacturing will stem from supply chain components sourced from China, the U.S., and other regions.

One quoted official, who reportedly works with India Prime Minister Narendra Modi indicated to the WSJ that Apple could see India as an export hub.

The WSJ notes an Apple spokeswoman as indicating that: “We appreciate the constructive and open dialogue we’ve had with the government about further expanding local operations.” That seems to be some acknowledgement of talks.

If local manufacturing of Apple products were to be formally announced, we strongly suspect a blowback reaction emanating from the Twitter account of U.S. President Donald Trump. It’s no secret that Trump has Apple in his crosshairs because of the presence of a large number of Apple’s manufacturing employees throughout China. Not to mention that Apple is the most highly watched supply chain among Wall Street investors.

We would surmise that Apple, similar to other Trump industry targets, should be prepared with some sort of follow-on announcement relative to U.S. investment.

Of course, we can speculate all we want since today’s U.S. political environment is one not experienced for quite a long time, if ever.

Bob Ferrari