India wants Apple to follow sourcing norms to set up stores: report

There is no special status for Apple in India and the government is firm that the maker of iPads and iPhones must meet the 30-per cent local sourcing norm applicable to all foreign retailers if it wishes to open stores in the country.

With demand and sales slowing in United States and China, its top markets, Apple is looking to expand its retail reach in India, one of the world's fastest markets for smart phones. For the Indian government, which exempts hi-tech firms from the purview of local sourcing norms, however, Apple does not come under the kind of technology that it wants to consider hi-tech, reports quoting a senior government official said.

Apple simply wants to grow faster in India, one of the world's fastest-growing smartphone markets, in order to make up for shortfalls in US and China.

And, it fits the rule as the Indian government has exempted foreign retailers selling high-tech goods from the rule, which makes it obligatory for foreign firms wanting to sell goods in India to locally source at lease 30 per cent of the value of goods sold in the store.

However, Apple's products were not considered to be in this category, said the official, who has direct knowledge of the matter.

"They did ask for a waiver but didn't provide any material on record to justify it. The decision was taken only after a thorough examination of their application," the source said.

The waiver is available only for investment in "state-of-the-art" or "cutting-edge technology", he added.

Apple, which makes most of its products in China, was planning to open exclusive outlets in the country for its products, and had sought relaxation in rules.

The company also had plans to sell used phones in India, which could be as lucrative, if not more, than selling new products.

India's decision has come as a setback for Apple, coming close to a four-day trip to India by Apple chief executive Tim Cook and his meeting with Prime Minister Narendra Modi last Saturday.