Bloomberg: ‘India Said to Require Local Sourcing by Apple to Open Stores’

Siddhartha Singh, Bloomberg (via. MacStories):

India’s finance minister has ratified a decision that Apple Inc. must meet local sourcing rules to open its own stores, according to people familiar with the matter, dealing what may be a fatal blow to the iPhone maker’s effort to open retail outlets in the country.

Minister Arun Jaitley decided to support the decision by India’s Foreign Investment Promotion Board that Apple will have to procure 30 percent of components locally if it wants to sell through its own retail stores […]

The finance minister’s decision could still be overturned, but that may require intervention from Prime Minister Narendra Modi.

India can provide waivers to the manufacturing rules for cutting-edge technology companies. But the [Foreign Investment Promotion Board] decided it can’t certify Apple for that exception, people familiar with the matter said.

This reeks of politics to me.

First the Indian government pronounces Apple a company whose ‘products are cutting edge technology and state-of-the-art’ and exempts them from the 30% local-sourcing and then revokes that claim? Especially after Apple set up facilities at Bengaluru and Hyderabad?

The article says Indian prime minister Narendra Modi can waive this requirement by intervening in finance minister Arun Jaitley’s decision. I don’t know much about Indian politics but googling ‘arun jaitley modi’ returns the first result: ‘Hardworking and loyal to Modi: The importance of being Arun Jaitley’. Also, both belong to the same political party — the Bharatiya Janta Party.
I highly doubt the prime minister would intervene on this matter — or even that this decision was taken without his awareness.

My theory is this: During Tim Cook’s visit, the Indian government realised Cook’s — and Apple’s — determination in India probably gives the Indian government the upper hand. It’s in the government’s interests to have Apple source 30% of its parts locally and their upper hand lets them reinstate these requirements.

In Uncategorized by Mayur Dhaka