A week ago, Shailesh Andrade for Reuters:
India last year exempted foreign retailers selling “state of the art” or “cutting edge technology” from the sourcing rule, which states that 30 percent of the value of goods sold in a shop should be made in India.
A panel set up by Sitharaman’s ministry had favored waiving the sourcing requirement for the U.S.-based phone-maker.
But a government official, with direct knowledge of the FIPB decision, said Apple’s request was turned down as it failed to provide any material “on record” to back it.
“We took a line that we wouldn’t mind waiving off the local sourcing norm for Apple’s high-end products,” said Sitharaman.
“(The) finance ministry has taken a different line. We will talk to them.”
I’d written previously on the news of Apple’s waiver being denied:
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.
Either the committee responsible for the original waiver — the Foreign Investment Promotion Board — wasn’t taken in confidence when the waiver was revoked or they were. Both ways, this is turning messy.
I stand by my initial theory: If Prime Minister Narendra Modi decides to pass the waiver, it’ll be solely after a well-thought weightage of pros and cons (considering Apple’s reaction to the revoked waiver), not because this news caught the PM by surprise.