Tim Cook’s magic fails to impress India; Government rejects easing local sourcing norm for Apple

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Tim Cook’s magic fails to impress India; Government rejects easing local sourcing norm for AppleApple CEO Tim Cook’s India visit could not please the Centre as the government is not relaxing a local content sourcing norm for Apple.
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This comes as a big blow to Apple as the iPhone maker wants to set up Apple stores in India and tap the fastest growing smartphone market in the country.

This means, Apple will have to meet the 30 per cent local content sourcing requirement even if it sets up single-brand retail stores in India.

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"Apple's proposal is acceptable to us but we cannot make an exception for it and forego the sourcing requirement if it wants to set up its own stores here," a senior government official told ET.

The iPhoner maker had applied for the relaxation under new FDI rules for companies.

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"There was no technical person in the cutting-edge panel, no substantial backing to the claim that there was cutting-edge technology. A broad policy needs to be in place to define what is cutting edge. It has to be there upfront in the policy. Otherwise it would be open to discretion and charges of corruption," the second official told ET.

As per the new policy, companies that bring cutting-edge technology to India can open single-retail brand stores without meeting the local sourcing norm.

Apart from Apple, Xiaomi and LeEco have also sought to open their own stores in India.

Presently, Apple sells its products in India through a network of franchisee-owned stores and sales crossed the $1-billion mark in 2014-15.

(Image: Reuters)