Apple given relaxation in sourcing only for first three years: Sitaraman
28 July 2016
Apple Inc, maker of the popular iPhones, is pushing ahead with plans to open its own retail stores in India, one of its fastest-growing markets.
With Apple sales falling in most markets except in India, the Indian government has given a "breather" for the `Apple Only' shops for first three years by providing relaxation from local sourcing norms.
The government said it has not completely dispensed with the compulsory 30 per cent local sourcing clause in the case of Apple.
''We're looking forward to opening retail stores in India down the road, and we see huge potential for that vibrant country,'' said chief executive Tim Cook Cook on Wednesday.
Apple Inc on Tuesday said sales of its iPhones in India bucked a global slowdown in purchases of the devices. Sales of the devices in India rose 51 per cent in the last three quarters compared with a year earlier, chief executive Tim Cook said on an earnings call.
India's commerce minister Nirmala Sitaraman on Wednesay told the Rajya Sabha that Apple has only been given a "breather" for the first three years by providing relaxation to it in local sourcing norms and the compulsory 30 per cent local sourcing clause has not been completely dispensed with.
"We have just given a relaxation that in the first three years, if local sourcing for their retail outlet is becoming difficult, the first three years will be exempted. But the average that we calculate for the local sourcing requirement will be applicable after that for five years.
"So, it is not that as if we have completely dispensed with that clause. We have only said that give a breather for the first three years. We may do it afterwards," Sitharaman said.
Replying to member's question, she said, "let me put it on record here that I have approached Apple to explain what we have done as a policy change or tweaking. We have not yet had any response from the Apple. So, there is nothing that we have approved."
Providing details, she said the average that we calculate for the local sourcing requirement will be applicable after that for five years.
"As regards the local sourcing requirement, the Apple has not even come back to us to get approved anything. What we have just said is, we just provided a relaxation," she said.
Government recently issued new norms allowing single-brand retail trading and exemption from local sourcing for 'state-of-the-art' and "cutting edge" technology with a waiver for three years, and the option to extend it for five years.
Apple may have to submit a fresh application for the same.
Apple CEO Tim Cook had visited India and met Prime Minister Narendra Modi and expressed the company's desire to set up plant here.
Cook today said the tech giant is "looking forward" to setting up retail stores in India to tap into the booming smartphone market here.