Apple wants to open retail stores in India, but it seems that it won't be able to circumvent requirements of locally sourced goods.
In India, any company that wants to open up retail stores must have at least 30 percent of the goods it plans to sell made locally. Recent rumbles suggested that Apple could bypass this rule due to its "cutting-edge technology," but it seems that it's not the case.
"A government panel has recommended exempting Apple from mandatory local sourcing norms, a move which would pave the way for Apple to open single-brand retail stores in the country," Indian publication Economic Times recently claimed.
However, a new report from Reuters citing a "senior government official" says the rules remain the same in Apple's case as they would for any other company attempting to open retail locations in the country.
While Apple reportedly requested a waiver on the rule, the government decided against it. In other words, Apple failed to justify that its "cutting-edge technology" should indeed warrant an exemption from the rule, so it has to comply with local regulations just like other companies.
"They did ask for a waiver but didn't provide any material on record to justify it. The decision was taken only after a thorough examination of their application," says the government official, as cited by Reuters. "The waiver is available only for investment in 'state of the art' or 'cutting-edge technology.'"
This means that if Apple wants to open retail stores in India, it has to source at least 30 percent of its goods locally. This will likely translate to a major setback in Apple's plans for India, just one week after Apple CEO and other company executives visited the country.
During the visit, Apple announced a design and development accelerator set to open in 2017 in Bengaluru. At the same time, the company also opened a new office in Hyderabad, focused on accelerating the development of its mapping products.
Apple planned to open at least three retail stores in India by the end of next year, but it remains to be seen whether it will manage to do it if the government denies its request for a waiver.
There's still hope, however, as Apple supplier Foxconn is reportedly planning to build an iPhone manufacturing plant in India. If Foxconn sets up that manufacturing facility, it would help Apple hit that 30 percent mark for locally sourced goods.
