Apple Stores in India: Will commerce ministry come to company’s rescue?

India’s commerce and industry minister on Monday said she was in talks with the finance ministry on Apple Inc’s foreign direct investment proposal that seeks a waiver from the country’s local sourcing rules.
Nirmala Sitharaman’s comments came days after the finance ministry asked the iPhone maker to meet rules that mandate foreign retailers to sell at least 30 percent locally-sourced goods if it wished to open stores in the country.
The minister, however, said she was not in favour of relaxing rules for Apple to sell refurbished second-hand phones in India.
Apple’s plans to open stores in the country recently suffered a setback as the Foreign Investment Promotion Board (FIPB) red-flagged a panel’s recommendation to relax the mandatory local sourcing norm for the Cupertino-based company to sell its products through the single-brand retail window.
The panel comprising representatives from departments of industrial policy and promotion (DIPP) and information technology had recommended a waiver from the 30% sourcing norm on the ground that Apple’s products were “cutting-edge”, which allows for doing away with the domestic procurement rule.
The government allows 100% FDI in the segment but companies are required to seek approval if overseas holding exceeds 49%. “There is no evidence before us to reveal that the products are cutting-edge or high-technology. Apple can open single-brand retail stores but has to meet the sourcing requirements,” said a source, who did not wish to be identified.