Apple may get to open stores without 30% sourcing norm


The government is set to waive the requirement of mandatory domestic sourcing for Apple, paving the way for the global technology giant to open its own retail outlets in the country.

Although Apple has been keen on opening its own stores, the policy requirement of mandatory sourcing of 30% of the goods from within the country proved to be a major hurdle since the market does not have vendors to meet its needs. Following a change in the policy last November, Apple has decided to seek government nod as the sourcing norms can now be waived for ‘state-of-the-art’ and ‘cutting-edge technology’.

On Tuesday, the iPhone and iPad maker made a presentation before a committee headed by industrial policy and promotion secretary Ramesh Abhishek where it made a case for use of the special provision. Sources told TOI that Apple was a fit case for relaxing the norms. “Their products certainly meet the requirement for waiving the local sourcing clause,” said a source, adding that a final decision will be announced in a few days.

Sources said Apple has indicated that it may produce locally in the future, although its current sourcing from the country is limited to some chargers, which are being exported to markets such as China. During the presentation, Apple was also asked about its plans to sell refurbished phones in the country and the company is learnt to have responded that it had no immediate plans at the moment.

While Xiaomi and LeEco have also submitted proposals to open single-brand retail outlets in the country, their proposals have not been taken up so far.The government allows 100% FDI in the segment but companies are required to seek approval if overseas holding exceeds 49%.

India has emerged as one of the fastest growing markets for Apple, with the company notching up over $1-billion (around Rs 7,000-crore at current exchange rate) sales revenue in 2015. Its sales grew 76% during the quarter ended December 2015 even as its global sales growth slowed to 0.4%. In recent months, the Steve Jobs-founded company has identified India along with China as its top markets.

 At present, Apple sells through its distributors in India. It indicated in the presentation that it would open several stores (without disclosing numbers) but would rely on other retailers as well.

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