The U.S. technology giant has been in talks with Indian officials for months, seeking “pre-requisites” - government tax breaks and incentives - for expanding its operations in one of the world’s fastest-growing smartphone markets.

During those talks, Apple has conveyed it wants India to defer an existing policy that plans to levy taxes on more imported mobile components in line with Prime Minister Narendra Modi’s “Make in India” drive to boost domestic manufacturing.

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While India’s government has been keen to get Apple to manufacture in India as a showpiece investment, it has told the U.S. firm there would be no policy exemptions, so there will be no tax breaks on parts imports, the people said.

“Apple wants duty-free imports of components. India wants indigenization,” said one person with direct knowledge of the talks.

Apple has expressed willingness to increase local value addition over time, but has stuck to its demand for immediate import tax relief to expand its iPhone manufacturing, the person added.

Apple declined to comment, and there was no response from either Modi’s office or the Ministry of Electronics and Information Technology, which is trying to help build an electronics manufacturing base.