Indian Prime Minister Narendra Modi is expected to finally approve a three-year extension on local-sourcing rules within the country, granted to Apple due to its single-brand retail company status selling "cutting-edge technology." Those familiar with the matter, speaking with Bloomberg, claimed that the Indian government as a whole is gearing up to make it easier for all companies like Apple to meet a similar criteria.
Before the so-called "shift" in Modi's government, India's rules on foreign direct investments required 30 percent of goods sold by a foreign company to be manufactured and produced within the country. Like most companies, the law prevented Apple's retail growth within India -- leading to a handful of third-party endorsed pop-up shops -- because of the fact that most of its goods are created in China.
Apple filed for a new retail application when the new shifts in India's laws began to pick up steam, but some confusion still remained over what would be considered "cutting-edge" and "state of the art" technology, which could eventually grant a company another 5-year extension on top of the blanketed 3-year ruling being made common. It's this "push to clarify" the country's laws and procedures that Modi is spearheading, eventually expected to allow Apple to open its first retail stores in India.
Modi’s push to clarify those procedures will pave the way for Apple to open a retail store, according to the people [familiar with the matter]. The new rules may also impact China’s Xiaomi Corp. and Leshi Internet Information & Technology Corp., which have also asked for exemptions.
Apple has been attempting to gain a foothold in India for a while now, most recently with CEO Tim Cook visiting the country, and Modi himself, to discuss manufacturing and retail opportunities. Its Authorized Mobility Resellers program has allowed Apple to skirt the country's restrictive retail presence rules, but still lacks the ability to bring in big sales numbers from India.
Top Rated Comments
Big win for Apple and India, the world's biggest democracy.
i hope the world's biggest dictatorship takes note.
Um, actually from talking to a forum member here several months ago who had issues with several iPhones in succession but no easy recourse because his only option at the time was to deal through a reseller, this IS a good thing for consumers in India who want iPhones.
The average income in India may be low but they've got a huge population and in that huge population is an affluent segment who can afford pretty much anything affluent people in the west can afford. Also there are a LOT of Indians who live most of the time in the west, but take incredible amounts of pride in India and are very much in touch with family back in India and often go back for visits and extended stays. A good friend of mine fits this description. The tastes they acquire here and the products they use here are thus spread to friends and family back in India, so the demand can come from that exposure alone.
I know I am always gratified as a consumer to know if I buy a product from a foreign manufacturer, that I can enjoy the same level of access and service as the customers in the manufacturers home country. I would imagine Indian consumers would feel the same way.
I doubt their poor are going to be selling kidneys to get an iPhone. It's a different culture, with different values and besides, there are already iPhones over there and have been for a long time, through resellers. As well as many other more desirable products.
The rule is purposely vague, but basically, "cutting edge" just means "cannot be sourced in India."
I suspect the original Indian ruling that Apple's products were not "cutting edge" was simply an attempt to get Apple to build an assembly plant in India, like the Foxconn factory already in China.
This extension of not having to comply with the 30% rule right away, is pretty useless unless Apple knows for sure that they'll get declared as high tech enough to get a further waiver within a few years. Otherwise, it seems like a trap designed to lure companies into opening stores.
Has Apple been granted "cutting edge" status? I don't see any news that says so, but would love a reference that does.
Indeed, the entire purpose of the 30% rule was to prevent the equivalent of a Walmart coming in and destroying all the local stores, which happens so often in the rest of the world.
Not to mention that India has a history of being treated as a colony, and really wants to make its own way if it can.
There's already several major India phone makers, producing nice items for a much more affordable price.
Karbonn and Micromax come to mind.