India to require Apple to use local sourcing in order to open Apple Retail Stores

“India’s finance ministry has rejected a government panel recommendation to exempt Apple Inc. from local sourcing requirements, two government officials said, a decision that could effectively block the tech giant’s plan to open its own retail stores in the country,” Rajesh Roy and Newley Purnell report for The Wall Street Journal. “‘We are sticking to the old policy,’ said one of the officials, who didn’t want to be identified. ‘We want local sourcing for job creation. You can’t have a situation where people view India only as a market. Let them start doing some manufacturing here.'”

“India requires single-brand retailers that are more than 51% foreign owned to buy at least 30% of their manufacturing materials from Indian vendors, preferably from small and medium-size enterprises, but there are not many high-end phone part makers in India to buy from to meet the requirement,” Roy and Purnell report. “However, the government is allowed to waive the requirement if the retailers are bringing ‘state-of-the-art’ and ‘cutting-edge’ technologies to India which aren’t available locally.”

“To assess whether a company qualifies for such an exemption, New Delhi set up a panel of bureaucrats to scrutinize proposals,” Roy and Purnell report. “Last month, the panel recommended waiving the local sourcing rule for Apple, but the Foreign Investment Promotion Board — a panel of bureaucrats that gives the final go-ahead to foreign – investment proposals — as well as Finance Minister Arun Jaitley have disagreed, the officials said.”

Read more in the full article here.

MacDailyNews Take: Protectionism: Harming the people it’s meant to help.

The “Make in India” program is supposed to focus on creating skilled jobs and minimizing environmental impact. Blocking Apple from selling Apple Certified Refurbished iPhones and forcing the company to set up factories full of entry-level assembly jobs in order to open brand new retail stores accomplishes neither objective.

Indians can’t have nice, clean stores or real iPhones are great prices (Apple Certified Refurbished iPhones are better than new fragmandroid phones) because your government is “protecting” you against such things in favor of importing pollution and crap, menial, unskilled, low-paying jobs. So, don your face masks like the Chinese to ward off the smog (not that iPhone assembly is particularly polluting, but the requirement forcing 30% of manufacturing into the country will lead to pollution from other industries) and have fun with your insecure, never-to-be-updated fake iPhones!

Or, some portion of the 1.3 billion Indian citizens could demand that the handful of government dullards blocking Apple reconsider their trade ideas.

Blow for Apple and Indian consumers as Indian government pushes protectionism – May 25, 2016
Apple hits setback in push to open retail stores in India – May 24, 2016
Apple’s U-turn in India: From arrogance to servility – May 23, 2016
Apple finds potential new factory hub – in India – May 23, 2016
Apple’s Tim Cook samples Bollywood, cricket, in bid to woo India – May 21, 2016
India shows Apple CEO Cook the love it’s yet to give the pricey iPhone – May 20, 2016
Apple CEO Cook: ‘We are in India for the next thousand years’ – May 20, 2016
Watch Apple CEO Tim Cook at his first cricket game in India – May 19, 2016
Apple opens Maps development office in Hyderabad, India – May 19, 2016
Apple CEO Cook debuts in India – May 18, 2016
Apple to open first-of-its-kind iOS App Design and Development Accelerator in India – May 18, 2016
Tim Cook visits India: Apple to expand its Indian software development center, build local start-up accelerator program – May 17, 2016
Apple Retail Stores to open in India by end of next year – May 16, 2016
iPhone sales surge 56% in India as Apple eats into Samsung’s high-end share – May 8, 2016
Apple deprivileged as India bows to Washington D.C. consensus on mobile phone import tariffs – May 7, 2016
India rejects Apple’s plan to import and sell refurbished iPhones – May 3, 2016
Indian government panel paves way for wholly-owned Apple retail stores in India – April 28, 2016


  1. I think that India and Apple could work well together, but I also know how Indian officials can put senseless obstacles in the way.

    This could come across as somebody hoping for a bribe, but I’d like to think that Apple is above that sort of thing and will not go down that route.

    India simply doesn’t currently have the means to supply even a tiny proportion of the parts that Apple requires, therefore it’s difficult to see how Apple can meet this ‘locally sourced’ requirement.

    It looks as though India’s finance ministry is determined to turn away actual jobs right now, while claiming that their stance is about job creation.

    Some people see this as a ploy to encourage Apple to assemble iPhones in India, but even if that happened, most of the components would be sourced elsewhere. Furthermore any new Foxconn factory will utilise a much greater proportion of robotic assembly, so there will be fewer jobs created than before.

  2. Cook & Co will keep up the dialog until a “compromise” is reached. The Press has been singularly focused on Cook & not following the puck. Foxconn’s CEO accompanied Cook & he didn’t go to India to meditate or vacation.

    China thinks it can dominate the world and monopolize manufacturing. Apple & Foxconn realize they need alternatives and India is one of them.

    India needs modernization with all the jobs it will bring, so the bureaucracy will eventually bend to the will of their techno-elite. They want high quality, long lasting iPhones, just like the industrialized countries.

    Indian companies and employees realize the benefits of India starting to look like an up & coming economy.

  3. Funny … This is exactly what Trump is advocating for the U.S. – force Apple to make the iPhone in the USA. Of course, this type of protectionism is near-sighted, and doesn’t recognize that Apple directly and in-directly creates 1 million jobs in the USA. I sympathize, or at least find more understandable, India’s position than Trump’s (yes, I am an American that loves his country). The problems that the country and the world face are not so simple as to be solved by populist silver bullets (a wall – that must be the answer, etc.). Capitalism (and democracy), if it is to survive, must find a way that is sustainable – that benefits all and not just a few; profit that is not made by taking advantage of or – degrading other humans or the environment. The world of finance needs to again serve society, business and citizens, not rule them – especially the crazy, risky investment practices of today that do not add value to the economy (like when their purpose was to support and encourage business) but now rather threaten society’s existence because of the insane greed of a few. May we find the collective sanity and a peaceful path to sustainability – as a nation and as a world of humans who’s destiny is collectively bound together.

    1. “funny” you should bring this up.

      I believe that within a decade Apple may start “assembling” iPhones in the US. As robotics, design and technological integration of device components accelerates, it might be desirable.

      Apple laptop boards initially were just crammed with various chips and other components. Look at a MacBook mother board today and it is absolutely tiny compared to the 1990s.

      But we are NOT going to bring back 1/4 million jobs from Asia that go to work every day in the US to assemble those phones.

  4. The word ‘bureaucrats’ explains a lot of decisions made in India’s…
    “To assess whether a company qualifies for such an exemption, New Delhi set up a panel of bureaucrats to scrutinize proposals,” Roy and Purnell report.
    The stultifying bureaucracy of India is probably the main reason why Apple is manufacturing stuff in China instead of India.

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