India May Exempt Apple From Sourcing Requirement For 'Two to Three Years'

Jun 6, 2016 3:38 am PDT by Tim Hardwick
The Indian government is prepared to allow Apple to open its first three planned retail outlets in the country without any sourcing requirement for their first few years of business, reports Times of India.

As a rule, 30 percent of goods sold by foreign companies must be manufactured or produced in the country, a requirement Apple does not meet as its products are largely made in China.


That obstacle initially appeared to have been removed for Apple last year, when India exempted retailers selling state-of-the-art goods from the rule, prompting the company to file a new application with the Indian government.

However, a recommendation from the country's Department of Industrial Policy and Promotion (DIPP) to allow Apple to move ahead with single-brand retail outlets was shot down by the ministry of finance, which decided Apple's products do not fall into the cutting-edge technology category.

Now, the DIPP and the finance ministry appear to be open to the idea of allowing Apple to set up shop in the country without immediately complying with the 30 percent rule. This would allow the company to look at the option of manufacturing in India and begin sourcing components locally as volume increases.

Apple has reportedly already informed the government that it has started buying chargers from the country, which are also being exported.

"It is only fair to insist on some local production and two-three years is a reasonable period. Five years may be too long," said the Times of India source, who did not wish to be identified.

The developments follow Apple CEO Tim Cook's recent weeklong visit to India, where he met with Prime Minister Narendra Modi and other local business leaders, actors, politicians, and developers.

During the visit, Apple announced the launch of a Maps development center in Hyderabad and an iOS app and design accelerator in Bangalore. Last quarter, Apple saw its revenue from India grow 56 percent, surpassing $1 billion.

Tag: India

Top Rated Comments

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41 months ago

Hmm not sure why they should bend the rules just for Apple. It is just a business after all.
I hope the government knows what it's doing then, it would certainly help them to have people making Apple parts there.


Because Foxconn will open shop there in that timeframe, and build iPhones locally.

http://9to5mac.com/2016/05/09/foxconn-india-iphone-manufacturing/
Rating: 13 Votes
41 months ago
Tim must have given the Indian government some watchbands.
Rating: 7 Votes
41 months ago
And so, logically after reading this article MR commenters conclude the Beats purchase was probably a waste of money.
Rating: 7 Votes
41 months ago

I'm amazed at how many people think that's "reasonable" to require 30% of the goods made locally. If it's reasonable, then let the USA require all stores in the USA have 30% of their goods made here. I'd say about 50% of them would go out of business immediately including Apple's stores and nearly 100% of all clothing stores. NOTHING is made here these days but food (and that provides jobs for illegals, not citizens) but hey, that's OKAY, we're a developed country and people don't need manufacturing jobs here. Let them have "service" jobs (most of which pay little to nothing beyond minimum wage) and soon we'll be more of a 3rd world country than most 3rd world countries already are. Yes, there are some jobs you can't outsource and there are quite a few high-end and skilled jobs (I'm in electronic engineering myself so I haven't had a rough time finding a job), but these types of jobs aren't unlimited and with over 300 MILLION people, they simply cannot and won't cut it to maintain a large middle class anymore, which is why the middle class is slowly but surely disappearing.

Now look at the minimum "free money" proposal in Switzerland (that failed for good reason, but had a point about the future). What happens when robots replace nearly ALL jobs at some point in the next 100 years? You'll have some jobs repairing robots (although one could argue eventually they will have robots that do that too) and some government jobs and not much else. It's the Jetsons except that that "slave driving Mr. Spacely" job "that made me push 20 buttons today" won't exist. You'll have those that OWN the robots and everyone else can just DIE. You'll have the top 1% and the DEAD because there won't be ANY of the jobs we take for granted even today. We're not talking about a few programmable robots assembling cars or spray painting, but eventually we will have "smart robots" that can pretty much be programmed to do just about ANYTHING. Why pay a person even $20,000 a year (not even counting benefits) if you can get a robot that can maybe do the job of 3 people (at least 3 shifts) that costs $100,000 that will last at least 10-20 years and will be paid for in less than two?

Sound ridiculous? Of course it does NOW. But 20 years from now? 50? 100? No, assuming we don't blow ourselves to oblivion by then, it WILL be a REALITY and people aren't even remotely prepared for that time. The problem is we keep procreating like fracking bunny rabbits (and the most are the at the bottom income levels that can't afford to raise them properly) and that means even more people with less and less jobs. It's not sustainable in the long run. You'll have people volunteering to help colonize Mars just so they don't starve to death here while the top 0.01% will be TRILLIONAIRES. It'll never be enough, though. They'll want to be quadrillionaires. Can't spend that much? That's not the point. Bill Gates can never spend all his money in any reasonable fashion. You don't exactly seeing him giving more than a small pittance away (at the insistence of his wife so she can feel better about being rich) relative to his wealth. Hey, invest it in AI and even better robots! Maybe one day the AIs will become self-aware and decide that top 0.01% is a waste of genetic material and do something about it?

There's this hypothesis in the wacky world of Ancient Aliens that the so-called "grey aliens" are actually cyborg robots and that they probably have either killed or imprisoned (in some kind of "Matrix") their masters at some point ala Terminator 2 meets The Matrix for either efficiency reasons or to protect them from "harm" (you're much safer in a virtual reality) and that's why the so-called Sumerian "gods" that are supposedly 8-feet tall and look like us because they created us through genetic manipulation aren't the aliens described in all these "close encounters" stories, but rather these identical looking 3.5 foot "greys" that are emotionless and mostly interested in genetic experiments (What would machines be interested in if they were self-aware? Programming...genetic programming sounds like a good guess). So maybe some trilloinaire will have a conscience with all these humans starving to death and figure, hey, I'll "save" what's left of humanity and put us into a Matrix-style virtual reality, kept alive on the bare minimum amounts of nutrients needed to maintain a never-ending dream state and used to further some experiment or the other. It's safe to say in 100 years we probably won't be able to tell a virtual reality from the real thing.... Or are we in it already??? :eek: ;)

Word salad needs croutons... and a point. Mostly croutons though.
Rating: 6 Votes
41 months ago

Just a wild thought. If some of the iOS software like Maps is made in India, could an argument be made that it should count towards the 30% locally sourced component of an iPhone?

The Indian government would obviously never let that argument fly, but it would be interesting if Apple decided to try that route.



It's 30% Goods. You are talking about 30% services. Read the article again.

PCB, metal, SOC chip, antennas, earphones are goods. Maps, Siri, iOS are softwares which form services. They are not tangible.

Clear distinction between the two.

This may seem like a fair play for both the parties. But if Apple cannot comply with the law of land in next 3 years, they can shut their shop or get it red sealed.
Rating: 5 Votes
41 months ago
Tim: can we have an exemption.
India: no
Tim: we will build a big plant and employ lots of people.
India: wow that great, we love it. When will that happen.
Tim: well it should be up and running in three years if we get the exemption, but we may decide to move the plant to Bangladesh or Pakistan if we don't.
India: oh, okay what if we give you an exemption for three years and then when the plant is operational you won't need the expemption.
Tim: sounds good......

To be continued.
Rating: 5 Votes
41 months ago

Because the rule is bad for India, and there are people in the government who know it. They may be using Apple to help institute some needed reform.

How is the 30% rule bad for India? From afar, it seems they want companies to have skin in the game. They want companies to contribute to the Indian economy beyond just selling to the citizens.
Rating: 5 Votes
41 months ago

I'm amazed at how many people think that's "reasonable" to require 30% of the goods made locally. If it's reasonable, then let the USA require all stores in the USA have 30% of their goods made here. I'd say about 50% of them would go out of business immediately including Apple's stores and nearly 100% of all clothing stores. NOTHING is made here these days but food (and that provides jobs for illegals, not citizens) but hey, that's OKAY, we're a developed country and people don't need manufacturing jobs here. Let them have "service" jobs (most of which pay little to nothing beyond minimum wage) and soon we'll be more of a 3rd world country than most 3rd world countries already are. Yes, there are some jobs you can't outsource and there are quite a few high-end and skilled jobs (I'm in electronic engineering myself so I haven't had a rough time finding a job), but these types of jobs aren't unlimited and with over 300 MILLION people, they simply cannot and won't cut it to maintain a large middle class anymore, which is why the middle class is slowly but surely disappearing.

Now look at the minimum "free money" proposal in Switzerland (that failed for good reason, but had a point about the future). What happens when robots replace nearly ALL jobs at some point in the next 100 years? You'll have some jobs repairing robots (although one could argue eventually they will have robots that do that too) and some government jobs and not much else. It's the Jetsons except that that "slave driving Mr. Spacely" job "that made me push 20 buttons today" won't exist. You'll have those that OWN the robots and everyone else can just DIE. You'll have the top 1% and the DEAD because there won't be ANY of the jobs we take for granted even today. We're not talking about a few programmable robots assembling cars or spray painting, but eventually we will have "smart robots" that can pretty much be programmed to do just about ANYTHING. Why pay a person even $20,000 a year (not even counting benefits) if you can get a robot that can maybe do the job of 3 people (at least 3 shifts) that costs $100,000 that will last at least 10-20 years and will be paid for in less than two?

Sound ridiculous? Of course it does NOW. But 20 years from now? 50? 100? No, assuming we don't blow ourselves to oblivion by then, it WILL be a REALITY and people aren't even remotely prepared for that time. The problem is we keep procreating like fracking bunny rabbits (and the most are the at the bottom income levels that can't afford to raise them properly) and that means even more people with less and less jobs. It's not sustainable in the long run. You'll have people volunteering to help colonize Mars just so they don't starve to death here while the top 0.01% will be TRILLIONAIRES. It'll never be enough, though. They'll want to be quadrillionaires. Can't spend that much? That's not the point. Bill Gates can never spend all his money in any reasonable fashion. You don't exactly seeing him giving more than a small pittance away (at the insistence of his wife so she can feel better about being rich) relative to his wealth. Hey, invest it in AI and even better robots! Maybe one day the AIs will become self-aware and decide that top 0.01% is a waste of genetic material and do something about it?

There's this hypothesis in the wacky world of Ancient Aliens that the so-called "grey aliens" are actually cyborg robots and that they probably have either killed or imprisoned (in some kind of "Matrix") their masters at some point ala Terminator 2 meets The Matrix for either efficiency reasons or to protect them from "harm" (you're much safer in a virtual reality) and that's why the so-called Sumerian "gods" that are supposedly 8-feet tall and look like us because they created us through genetic manipulation aren't the aliens described in all these "close encounters" stories, but rather these identical looking 3.5 foot "greys" that are emotionless and mostly interested in genetic experiments (What would machines be interested in if they were self-aware? Programming...genetic programming sounds like a good guess). So maybe some trilloinaire will have a conscience with all these humans starving to death and figure, hey, I'll "save" what's left of humanity and put us into a Matrix-style virtual reality, kept alive on the bare minimum amounts of nutrients needed to maintain a never-ending dream state and used to further some experiment or the other. It's safe to say in 100 years we probably won't be able to tell a virtual reality from the real thing.... Or are we in it already??? :eek: ;)

Jeepers Christmas Dude, this is MacRumors forum not Above Top Secret. :eek::confused: Please lay off the triple caffeinated mocha espresso! And yes, we are headed for some serious problems and we have unsustainable imbalances but I don't think that's something we can adequately cover in the topic.
Rating: 4 Votes
41 months ago

So pretty soon the people of Indian will be selling internal organs to buy iPhones? Will there also be credit agencies setup to loan you money just for an iPhone that costs 3-10 years of your salary? Both worked out well for China. Perhaps they will also have businesses selling a service that tags text messages send from non-iPhones with "Sent from my iPhone"?

India doesn't seem like a great place for selling a Hermes watch band....just saying.

iPhones are already on sale in India. Have been for a long time. In every country there's a percentage of the population who can afford an iPhone. India has over a billion people. Even a small percent of that billion is a heck of a lot of people. They have over 100 billionaires, over 360K millionaires, large middle class, and a king size lower class. They have money to spend, which is why Apple is heavily courting the country.

Hermes watch band? They could probably pick them up from one of the two Hermes stores in India.
Rating: 4 Votes
41 months ago
3 years seems like a reasonable timeframe to change things from Apples side.
Rating: 4 Votes

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