Times of India: ‘Apple may get 2-3 years’ breather on sourcing norm’

Sidhartha & Surojit Gupta, The Times of India:

The government is expected to allow Apple to open its own retail outlets in the country without any sourcing requirement for two-to-three years as it tries to work out an arrangement under which the Cupertino, California-based company will agree to local purchases once it gets a stronger toehold in the country.

And I thought this was messy politics before; I’m not surprised anymore. Here’s the events so far:

  • Indian government waives the local-sourcing requirement.
  • Tim Cook visits India.
  • Indian government revokes the waiver (but the Prime Minister can still revoke the revocation)
  • Indian government is reportedly still considering the waiver
  • Indian government says local sourcing norms are lax on Apple for 2-3 years.

I stand by my theory that the Indian government made these decisions fully cognisant of the power dynamics and who had the upper hand. None of this was executed without proper thought.

I think it’s a smart move when you see it through the government’s eye. If all goes as they plan and Apple sets up shop, what is Apple going to do when the 2-3 year limit approaches and there’s still no 30% local-sourcing? Wind up their premium stores and go back to selling through third-parties they’ve partnered with? I’m sure Apple sees through this.

(I find it funny how the angle here is that of giving Apple a ‘breather’. From the looks of it, the government seems to be quite interested in bring Apple onboard and not, instead, giving Apple a concrete ’30% or you’re out’ directive. Also, on the off-chance that it happens: If you read a story tomorrow that reads ‘Indian Government waives local-sourcing norms for Apple’, you know which way the scales tipped.)

UPDATE:
Dave Mark, The Loop:

This would be a foot in the door for Apple. Hard to imagine the government would force Apple to close all their Apple Stores once they are operating, especially since they would become a local employer and a shutdown would mean job loss.

Dave’s viewpoint and mine are made from different perspectives and I find the contrast fascinating. A summary: Between Apple and the Indian government the party that has more to lose at the end of the ‘breathing period’ would be under pressure. Dave thinks it’s the Indian government and I think it’s Apple.

In Uncategorized by Mayur Dhaka