Apple May Be Exempted From Local Sourcing For 2-3 Years

06/06/2016 6:14 PM IST | Updated 15/07/2016 8:27 AM IST
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BEIJING, CHINA - JUNE 3: (CHINA OUT) An Apple logo is seen on June 3, 2016 in Beijing, China. Apple Inc. was recently listed as an enterprise of serious dishonesty and fined 50,000 yuan (about 7,612 USD dollar) by the Beijing Municipal Bureau of Statistics due to some discrepancies in their financial status and retail status in 2014. (Photo by VCG/VCG via Getty Images)

After flatly denying permission to Apple Inc to open its own retail stores in India unless it met local sourcing norms, the government of India seems to have softened up and might grant the tech giant a waiver of 2-3 years to meet its sourcing obligations.

The government might relax the 30% local sourcing norm for Apple to begin with. This will give the Cupertino, California, based company time to figure out its local sourcing in India. Apple originally applied forpermission to open stores in India in January.

iphone india

A report in the Times of India suggests that the finance ministry and the Department of Industrial Policy and Promotion (DIPP) has already been considering giving smartphone makers relief from local manufacturing norms.

"It is only fair to insist on some local production and two-three years is a reasonable period. Five years may be too long," said a source to TOI.

tim cook

In 2015, the government had set up rules for foreign companies to open their own branded stores in India.That included a clause requiring sourcing 30% of the total product from India. The finance ministry had previously rejected DIPP committee's recommendation to relax the rule for Apple.

Last week, Commerce and Industry Minister Nirmala Sitharaman suggested that the norms might be relaxed for Apple in a press conference.

"When you offer such a large market to a foreign supplier, it's only fair that you expect him to create some jobs in India. Otherwise, we will become a nation of traders," Finance Minister Arun Jaitley said last week.

Earlier Apple's application to sell refurbished phones in India was rejected by the government. Apple's CEO Tim Cook also visited India to open two new Apple development centers in Hyderabad and Bengaluru. He also had a meeting with Prime Minister Narendra Modi to discuss the company's future plans in India.

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