Apple Said to Be Near Deal to Manufacture Products in India

A team of executives led by Priya Balasubramaniam, an Apple vice president, met with senior Indian government officials in New Delhi on Wednesday to discuss the firm’s proposals, the official said.

“It’s almost a done deal,” said the official, who has direct knowledge of the matter.

Apple’s main requests are related to tax and tariff exemptions, which the Finance Ministry “will look into,” according to the official.

“Many of the incentives sought by Apple are workable,” the official said.

Making goods such as iPhones locally may help the Cupertino, Calif., company to open its own stores in India, in turn building its brand in a country where it has less than a 5% share of a booming smartphone market. Sales in China for years propelled Apple’s expansion, but growth there has been slowing.

Separately, a top bureaucrat who works closely with Prime Minister Narendra Modi said the government’s intention was to “settle with Apple.” The company is seeking a 15-year tax holiday on imports of components and equipment, the official said.

Under Mr. Modi, India has been eager to attract foreign investment and create the manufacturing facilities and jobs the country needs to sustain long-term growth.

“We appreciate the constructive and open dialogue we’ve had with [the] government about further expanding our local operations,” an Apple spokeswoman said.

“We’ve been working hard to develop our operations in India.” The spokeswoman declined to elaborate further on the talks.

Analysts say India should soon overtake the U.S. as the world’s second-biggest smartphone market after China. Smartphone shipments in India grew 18% last year, compared with just 3% globally, according to Counterpoint Research.

“Apple would get some brownie points with the government if they could say, ‘We are contributing to India and creating value for the local economy,’” said Neil Shah, an analyst with Counterpoint.

If Apple is able to open its own stores in India, it would help make its brand more recognizable in a country dominated by rival smartphone markers selling largely cheaper devices.

The official who works with Mr. Modi said Apple could even see India as an export hub.