Apple‘s persistence in negotiations with the Indian government might finally be paying off and it soon might have the fairy tale ending it’s dreaming of for a local Apple Store in India. An anonymous source talking to the Times of India claims that the government might be willing to waive the “30 percent rule” in Apple’s favor for two to three years in order to give Apple the chance to comply with the law and sell locally sourced goods by the time that grace period is over.
In order to help drive its economy forward, India instated a law that required foreign companies to source at least 30% of its total sales value from local vendors. Last year, the government somewhat relaxed that rule, exempting companies that are selling state-of-the-art technology and products.
Given Apple’s prominence in the smartphone industry, one would perhaps presume that the company would fall under that exemption. India’s finance ministry, however, believes otherwise, perhaps seeing Apple’s products as not really that “state of the art” compared to local mobile devices. Even with a recommendation from the country’s Department of Industrial Policy and Promotion (DIPP), it seemed that negotiations would fall through.
Now it would seem that a compromise might be reached that could satisfy both parties. According to the source, Apple would be allowed to sell its products in its own Apple Store for two to three years without having to comply with the sourcing requirement. That period, however, will be used to give Apple the chance to prepare its production and materials for the said requirement.
At the moment, Apple sources its materials mostly from China. Its one ray of hope is that Foxconn, its biggest manufacturing partner, is also looking into setting up a factory in India, which could, in theory, help Apple satisfy the 30% requirement. Of course, that hinges on Foxconn’s timetable, which could change or be delayed. The 2-3 year grace period might be in lieu of that possibility. At the moment, however, none of this has been confirmed, leaving Apple’s dream in India still hanging in the balance.
SOURCE: Times of India