India asking for commitment on manufacturing before approving Apple Stores

The Indian government is aiming to get a firm commitment from Apple on local manufacturing before authorizing the launch of any Apple Stores in the country, a report said on Monday.

If Apple can announce a timeframe for local manufacturing plans, India could loosen policies on local sourcing, a senior government official told Bloomberg. The country's Finance and Commerce Ministries are said to be in talks about adjustments to accommodate Apple, which could include not just a launch without active factories but the ability to use partners like Foxconn, which is already said to be planning an Apple-oriented factory.

Current rules require foreign firms operating single-brand stores to source at least 30 percent of goods or components locally. As it stands that would be a problem for Apple, which has only one factory of its own — a Mac facility in Ireland — and just recently started buying chargers from India.

Exceptions can be granted, but last month Finance Minister Arun Jaitley ratified a Foreign Investment Promotion Board decision waiving that possibility. That led Commerce and Industry Minister Nirmala Sitharaman to initiate talks with the Finance Ministry, hoping to reverse the situation.

Apple needs first-party stores to help make inroads into India, a place it has identified as a growth market even though the vast majority of people there can't afford an iPhone — most phones sold in the region cost less than $150. As a result the company controls about 2 percent of Indian phone market, though it's counting on a growing middle class to improve its success.