New Delhi: Smartphone giant Apple has said that it won’t set up its stores unless the government doesn't exempt it from 30 per cent local sourcing norms on foreign direct investment.
According to a report in Economic Times, the American multinational has no immediate plans to manufacture devices in India or buy parts from vendors in the country.
Recently, Finance Minister backed the Foreign Investment Promotion Board (FIPB) decision that Apple must meet local sourcing rules to open its own stores. The decision was said to be a fatal blow to the iPhone maker’s effort to open retail outlets in the country.
As per the decision, Apple needs to procure 30 per cent of components locally if it wants to sell through its own retail stores. The idea behind this norm was to create jobs in the country.
"The 30 per cent sourcing norms would apply to Apples proposal," said a top Finance Ministry official, adding that it will defeat the purpose of Make in India and job creation.
The company has sought exemption from the local sourcing norms as the US-based giant makes state-of-the-art and cutting-edge technology products for which local sourcing is not possible. Single-brand retailers are also allowed to take e-commerce route for such trading.
Apple has already made investments in India at two places. One is a map development centre in Hyderabad that will create up to 4,000 jobs and an app design and development accelerator in Bengaluru.
Apple CEO, who was in India on a maiden visit last week, had said that the company seeks to capitalize on the market’s prospects and revive its growth. He had also expressed desire to import refurbished iPhones to India in order to make such phones available at an affordable price to Indian consumers.
The company sells its products through Apple-owned retail stores in countries like China, Germany, the US, the UK and France, among others. It has no wholly-owned store in India and sells its products through distributors such as Redington and Ingram Micro.
Meanwhile, Commerce Minister Nirmala Sitharaman has said that her Ministry will again try and initiate discussions with the Ministry of Finance to exempt Apple from 30 percent local sourcing norms on foreign direct investment in single brand retail. At present, 100 per cent FDI is permitted in the sector. But beyond 49 per cent, permission from the Foreign Investment Promotion Board (FIPB) is a must.
However, the Minister said that she was not in favour of Apple selling refurbished second hand phones in the country.
Notably, India is fastest-growing smartphone market in the world, with a billion devices forecast to be sold over the next five years.
