Roger Fingas
India's finance minister has reportedly ratified a ruling that Apple must follow local sourcing rules, potentially halting the company's near-term attemps to launch its first stores in the country.
Arun Jaitley supported the Foreign Investment Promotion Board's view that Apple can't be exempt from the rules, sources told Bloomberg on Wednesday. Indian regulations normally state that a foreign business must source at least 30 percent of its components locally if it's running a single-brand store.
That's currently impossible for Apple, as the company's suppliers are based mostly in China and have no manufacturing footprint in India. Foxconn is hoping to build an Indian facility, but no deal has been signed, and even then construction could take about a year and a half.
Jaitley's decision could theoretically be overturned, but that might require the personal intervention of Prime Minister Narendra Modi, whose platform is based to a degree on a "Make in India" initiative intended to encourage local manufacturing. Cook met with Modi on Saturday, discussing retail stores and manufacturing as two of many topics.
Without any stores of its own, Apple has had to adapt to the country's unique retail landscape through various third-party distribution and reseller deals. The strategy has seen some success, although the iPhone has just a 2 percent share of the country's phone market.
Amber Neely
Andrew Orr
William Gallagher
Christine McKee
AppleInsider Staff
Chip Loder
49 Comments
It would appear China and India are actually looking out for their citizens when it comes to jobs. Why can’t the U.S. government do the same for its citizens? Every time a proposal is made to protect or return jobs to the U.S. it is shot down as bad for the economy or as potentially starting a trade war. So jobs continue to move out of the country. Even U.S. tech companies hire educated foreign workers on H-1Bs mainly because they are cheaper. Let’s face it, there are lots of people who are not cut out for college. Those people used to be able to graduate from high school and get a decent paying job on the local stove factory assembly line. Now they get welfare checks or work for the minimum wage and are a burden on their fellow citizens and a drain on the economy. What happens when robots take over what menial jobs are left?
Because we are not an undeveloped dirt poor overpopulated sewer.
India is really pissing on Apple, expecially after the major financial commitments that Tim announced last week.
Moving forward....
Since the rule applies to "single-brand" stores, maybe Apple could modify its retail strategy in India to increase the emphasis on 3rd-party accessories. Those accessories are not Apple-branded products. Potentially Apple could create a retail model (just for India) that heavily includes Apple products, but also includes enough focus on the non-Apple products to fit legitimately in the multi-brand category.