Apple may be confronted with even higher iPhone taxes, import restrictions on the Indian market

Apple may face more difficult trading conditions in India in the future, after Prime Minister Narendra Modi's top advisor insisted that the country limit and heavily tax the import of luxury goods like the iPhone instead of raising interest rates to strengthen the rupee .

In an interview, Rathin Roy, member of the Economic Advisory Council, insisted that the government should make it less attractive for the citizens of the country to enjoy luxury goods, reports Bloomberg. "We need to actively send signals to discourage or discourage the increase in consumption of what I describe as explicit luxury," the consultant said.

This explicit luxury includes the iPhone, which Roy noticed that he had recently seen an increase in imports to India. As an extra exle of luxury-based spending, Roy suggested that expenses for overseas education and other services have also increased.

Roy's comments follow an announcement by the Indian government on Wednesday that it has increased import taxes on a variety of goods, including jewelry and shoes, by $ 12 billion. The iPhone and similar goods are likely to be affected by future increases in import taxes, as electronics and gold are the country's largest imports behind oil.

The four-year high of Oil would make global funds nervous, which in September 2017 raised $ 2.45 billion from local bonds and shares. These recordings would have contributed to reducing the value of the rupee to lows, making it the worst performing currency in Asia according to economists.

A Bloomberg Investigation of economists reveals that most would require an interest rate increase of 25 basis points by the central bank, but Roy rejects this, suggesting that it is not the right answer to resolve the bad situation of the currency. The government also opposed attempts to curtail the currency, with measures to improve the availability of cash at banks that are part of the countermeasures.

The increases in luxury products would be similar to those of Indonesia, another country with a current account deficit. In the case of Indonesia, the country used the opportunity to postpone "heavy import infrastructure projects" and increase taxes on imports of luxury goods.

Although Roy's advice will be heard by Prime Minister Modi, it remains to be seen whether it will be adopted by the country in the coming months while trying to rectify the rupee. If India takes over the recommendation, Apple's existing attempts to increase sales in the country can be taken over.

Apple is currently waiting for permission to open full business-run stores in the country and has looked to open premium franchise-shared stores as a temporary measure. It may also be able to counteract some of the increase in the import tax by expanding the existing iPhone production activities with assembly partner Wistron, who uses it to make the iPhone 6s for local sales.

Apple lost three local managers earlier this year, who replaced the company in August with a new head of operations. Michel Coulomb reportedly has an aggressive strategy to revive iPhone sales, which has apparently dropped to only 1 percent of the market.

A fight with the Telecom Regulatory Authority of India (TRAI) is an even greater threat to its efforts, with a possible ban on iPhones of the country's mobile networks on the cards if the company does not comply with laws that require the installation of an official anti-spam app. The expectation is that Apple and the regulator will comment on this.

© Appleinsider

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