NEW DELHI: Apple’s plans to open its signature stores in India may end up benefitting the entire telecom gadget industry with the government mulling the option of waiving of local sourcing conditions for overseas mobile phone manufacturers.
The Department of Investment Policy and Promotion (DIPP), the nodal agency for such policy moves, is learnt to be open to relaxing the condition that stipulates companies to source at least 30% of their components or merchandise for being eligible to set up company run retail stores in India.
The California-based company, whose CEO Tim Cook was in India recently, has sought easing of this norm to enable it to open the its iWorld stores that sell iPhone, iPads and its other proprietary products.
The Foreign Investment and Promotion Board (FIPB), the nodal agency that vets overseas investment applications, two weeks back ruled that Apple can open its stores only if it met the 30% local sourcing conditions.
According to current rules, a panel in the DIPP first approves a company’s application, and then sends it to FIPB for a formal clearance.
The government can relax mandatory local sourcing norms for single-brand retailing if it is convinced that the company’s cutting edge production technology requires specific components that cannot be sourced locally.
The Finance ministry however, is of the view that relaxing these conditions would go against the government’s Flagship Make in India initiative, a source, who did not wish to be identified, told
HT. Launched in 2014, Make in India is an umbrella plan to turn the country in to a manufacturing power house.
India has been hard selling this initiative to overseas investors many of which such as Xiaomi and Foxconn among others, have announced plans to make phones and gadgets in India besides opening dedicated stores.
Finance ministry, sources said, is of the view that an exemption of the local sourcing norms only for Apple would send wrong signals to other investors, which have already detailed out their India specific rollout plans.
It was only last week when commerce minister Nirmala Sitharaman had said that her department is in talks with finance ministry to reconsider Apple Inc’s foreign direct investment proposal that seeks a waiver from the country’s local sourcing rules.
Apple currently has Apple-owned stores across the world, including the US, the UK and China. It sells in India through distributors, such as, Redington, Ingram Micro and Bettel.