Indian finance minister shoots down prospect of local Apple Stores - report

AppleInsider

India's finance minister has reportedly ratified a ruling that Apple must follow local sourcing rules, potentially halting the company's near-term attemps to launch its first stores in the country.

Arun Jaitley supported the Foreign Investment Promotion Board's view that Apple can't be exempt from the rules, sources told Bloomberg on Wednesday. Indian regulations normally state that a foreign business must source at least 30 percent of its components locally if it's running a single-brand store.

That's currently impossible for Apple, as the company's suppliers are based mostly in China and have no manufacturing footprint in India. Foxconn is hoping to build an Indian facility, but no deal has been signed, and even then construction could take about a year and a half.

Jaitley's decision could theoretically be overturned, but that might require the personal intervention of Prime Minister Narendra Modi, whose platform is based to a degree on a "Make in India" initiative intended to encourage local manufacturing. Cook met with Modi on Saturday, discussing retail stores and manufacturing as two of many topics.

Without any stores of its own, Apple has had to adapt to the country's unique retail landscape through various third-party distribution and reseller deals. The strategy has seen some success, although the iPhone has just a 2 percent share of the country's phone market.

lkrupp

It would appear China and India are actually looking out for their citizens when it comes to jobs. Why can’t the U.S. government do the same for its citizens? Every time a proposal is made to protect or return jobs to the U.S. it is shot down as bad for the economy or as potentially starting a trade war. So jobs continue to move out of the country. Even U.S. tech companies hire educated foreign workers on H-1Bs mainly because they are cheaper. Let’s face it, there are lots of people who are not cut out for college. Those people used to be able to graduate from high school and get a decent paying job on the local stove factory assembly line. Now they get welfare checks or work for the minimum wage and are a burden on their fellow citizens and a drain on the economy. What happens when robots take over what menial jobs are left? 

Templeton

Because we are not an undeveloped dirt poor overpopulated sewer.

MacPro

Templeton said:

Because we are not an undeveloped dirt poor overpopulated sewer.

Or refuse to pay women equally for the same job ... oh wait a minute ...

slprescott

India is really pissing on Apple, expecially after the major financial commitments that Tim announced last week.

Moving forward....
Since the rule applies to "single-brand" stores, maybe Apple could modify its retail strategy in India to increase the emphasis on 3rd-party accessories.  Those accessories are not Apple-branded products.  Potentially Apple could create a retail model (just for India) that heavily includes Apple products, but also includes enough focus on the non-Apple products to fit legitimately in the multi-brand category.

bsimpsen

lkrupp said:

It would appear China and India are actually looking out for their citizens when it comes to jobs. Why can’t the U.S. government do the same for its citizens? Every time a proposal is made to protect or return jobs to the U.S. it is shot down as bad for the economy or as potentially starting a trade war. So jobs continue to move out of the country. Even U.S. tech companies hire educated foreign workers on H-1Bs mainly because they are cheaper. Let’s face it, there are lots of people who are not cut out for college. Those people used to be able to graduate from high school and get a decent paying job on the local stove factory assembly line. Now they get welfare checks or work for the minimum wage and are a burden on their fellow citizens and a drain on the economy. What happens when robots take over what menial jobs are left? 

Here's how China looks out for their citizen's jobs... http://www.scmp.com/news/china/economy/article/1949918/rise-robots-60000-workers-culled-just-one-factory-chinas

As Steve Jobs said years ago, those jobs are never coming back.

jbdragon

bsimpsen said:

lkrupp said:

It would appear China and India are actually looking out for their citizens when it comes to jobs. Why can’t the U.S. government do the same for its citizens? Every time a proposal is made to protect or return jobs to the U.S. it is shot down as bad for the economy or as potentially starting a trade war. So jobs continue to move out of the country. Even U.S. tech companies hire educated foreign workers on H-1Bs mainly because they are cheaper. Let’s face it, there are lots of people who are not cut out for college. Those people used to be able to graduate from high school and get a decent paying job on the local stove factory assembly line. Now they get welfare checks or work for the minimum wage and are a burden on their fellow citizens and a drain on the economy. What happens when robots take over what menial jobs are left? 

Here's how China looks out for their citizen's jobs... http://www.scmp.com/news/china/economy/article/1949918/rise-robots-60000-workers-culled-just-one-factory-chinas

As Steve Jobs said years ago, those jobs are never coming back.

If you price yourself out of the marketplace, you will be replaced by ROBOTS!!! $15 a hour to flip burgers? I did that job as a kid for $3.35 a hour. It's a job a monkey could almost do. It's NOT a job to raise a family on unless you own the business. You want more money, you need to make yourself more valuable to be worth more. If you can be replaced by any Tom, Dick or Jane off the street, what makes you think you should get a lot of money. You know what the end result is, besides the job losses? The prices on everything also go up and you are right back to where you are before, except those making say $16 a hour or so are now screwed because they in effect are making less money because costs on everything went up on them except for their paycheck. You see the long lines of people building iPhones because labor is cheap, but even at Foxconn where Apple is forcing higher pay, even Foxconn is starting to bring in Robots. Do you really think if Apple brought the iphone into the U.S. you would see long lines of people building iPhones and iPads? NO! you would see lines of Robots instead and a higher cost iPhone because most of the parts are made in China. The Industry is mostly GONE from the U.S. Besides, what's wrong with people in China also getting jobs? It is a global economy. If you use a Self Check out machine, you are in effect killing jobs!!!

bobschlob

bsimpsen said:

lkrupp said:

It would appear China and India are actually looking out for their citizens when it comes to jobs. Why can’t the U.S. government do the same for its citizens? Every time a proposal is made to protect or return jobs to the U.S. it is shot down as bad for the economy or as potentially starting a trade war. So jobs continue to move out of the country. Even U.S. tech companies hire educated foreign workers on H-1Bs mainly because they are cheaper. Let’s face it, there are lots of people who are not cut out for college. Those people used to be able to graduate from high school and get a decent paying job on the local stove factory assembly line. Now they get welfare checks or work for the minimum wage and are a burden on their fellow citizens and a drain on the economy. What happens when robots take over what menial jobs are left? 

Here's how China looks out for their citizen's jobs... http://www.scmp.com/news/china/economy/article/1949918/rise-robots-60000-workers-culled-just-one-factory-chinas

As Steve Jobs said years ago, those jobs are never coming back.

Gee, I wonder who manufactures the robots? Or do they just procreate?

Ot maybe I'm just pissed because I lost my job when they closed the local buggy-whip factory.

cnocbui

slprescott said:

India is really pissing on Apple, expecially after the major financial commitments that Tim announced last week.

Moving forward....
Since the rule applies to "single-brand" stores, maybe Apple could modify its retail strategy in India to increase the emphasis on 3rd-party accessories.  Those accessories are not Apple-branded products.  Potentially Apple could create a retail model (just for India) that heavily includes Apple products, but also includes enough focus on the non-Apple products to fit legitimately in the multi-brand category.

That is a rather jaundiced viewpoint.  Apple have asked to dump used phones on the Indian market, and India has rightly said no to the proposal, which I think most countries would do that had local manufacturers of competing products who were actually investing in the local economy.

The store ruling is similar.  They have a rule that benefits the local economy that existed before Apple made their application.  Why should India make an exception for Apple?

A $10M investment in a facility working on maps is hardly major, and it isn't actually a case of Apple establishing an actual direct presence in India, their map venture is in reality more a case of them engaging a local Indian firm to do work for them.  If the proposed investment by Foxconn goes ahead, that certainly would be a lot more significant, but once again, Apple itself would still not have a direct presence in India, which I don't blame them for in the least, given the high-handedness of the Indian Judiciary and Tax department.  I don't think Tim Cook wants to be subpoenaed to appear in an Indian court, every time some minor local supplier thinks they have a grievance, which is what happened to the chairman of Samsung Electronics, Lee Kun-hee.  I wonder if the arrest warrant is still outstanding.

Tim Cook's first visit to India was an exploratory mission, no clear-cut investment agenda

http://www.businessinsider.in/Tim-Cooks-first-visit-to-India-was-an-exploratory-mission-no-clear-cut-investment-agenda/articleshow/52386943.cms

tundraboy

There is no rational economic reason why a single-brand store should be subject to different regulations than one that's not single-brand.  Local content requirements have always been sops to politically connected local companies that would otherwise shrivel up and die if exposed to real competition.

anantksundaram

Templeton said:

Because we are not an undeveloped dirt poor overpopulated sewer.

At the rate we're going, I wouldn't be so smug...

slprescott

cnocbui said:

slprescott said:

India is really pissing on Apple, expecially after the major financial commitments that Tim announced last week.

Moving forward....
Since the rule applies to "single-brand" stores, maybe Apple could modify its retail strategy in India to increase the emphasis on 3rd-party accessories.  Those accessories are not Apple-branded products.  Potentially Apple could create a retail model (just for India) that heavily includes Apple products, but also includes enough focus on the non-Apple products to fit legitimately in the multi-brand category.

That is a rather jaundiced viewpoint.  Apple have asked to dump used phones on the Indian market, and India has rightly said no to the proposal... <+ the remainder of your response>

Thank you for that information and the civil exchange of ideas. I appreciate your perspective.

anantksundaram

One, this is the rule in India, so it's by no means unique to Apple. Everyone has to play by it. Two, it's dumb from India's standpoint, since it impedes opportunities for local employment (I am surprised that the government does not consider that 'local sourcing') and future and/or collateral (e.g., Maps-type) investments that would result from from the presence of the foreign retailer.

Three, perhaps most importantly (and thankfully), it'll probably be overturned. This is typical of the 'process' that has to be seen as being followed.

volcan

I'm not sure why Apple even wants stores in India. Their annual median per capita income is $616, ranking them 99th among 131 other countries. How many Indians can even afford an iPhone?

usersinceos1

volcan said:

I'm not sure why Apple even wants stores in India. Their annual median per capita income is $616, ranking them 99th among 131 other countries. How many Indians can even afford an iPhone?

Well, there are a LOT of Indians, so even if the median income is low, there are still plenty of people who are earning a lot more than that, and can (and do) easily afford to buy Apple products.

As an outsider, I won't judge whether India's "made in India" policy is good or bad for its economy or its people.  I sure wouldn't want such a policy to be implemented here, we'd certainly have fewer choices about what to buy.

jdgaz

So no Tiffany Stores in India? No Ralph Loren? No Coach? No Starbucks? No single brand outlet stores? Very strange rules.

mdriftmeyer

bsimpsen said:

lkrupp said:

It would appear China and India are actually looking out for their citizens when it comes to jobs. Why can’t the U.S. government do the same for its citizens? Every time a proposal is made to protect or return jobs to the U.S. it is shot down as bad for the economy or as potentially starting a trade war. So jobs continue to move out of the country. Even U.S. tech companies hire educated foreign workers on H-1Bs mainly because they are cheaper. Let’s face it, there are lots of people who are not cut out for college. Those people used to be able to graduate from high school and get a decent paying job on the local stove factory assembly line. Now they get welfare checks or work for the minimum wage and are a burden on their fellow citizens and a drain on the economy. What happens when robots take over what menial jobs are left? 

Here's how China looks out for their citizen's jobs... http://www.scmp.com/news/china/economy/article/1949918/rise-robots-60000-workers-culled-just-one-factory-chinas

As Steve Jobs said years ago, those jobs are never coming back.

Don't quote Steve. He ran our NeXT Manufacturing as the world's first fully automated plants and it nearly bankrupted the company. He then sold off hardware and without the Apple merger we were days away from being a WebObjects only IPO Enterprise company. Half of Steve's ideas I could toss in a shredder, on a weekly basis. My favorite ones were about his asinine understanding of biochemistry and insistence of using Orange Juice in his Granola. The man was smart in many areas, and blind as a bat in equally as many areas.

frac

Templeton said:

Because we are not an undeveloped dirt poor overpopulated sewer.

As opposed to the undeveloped dirt poor sewer that was the US before you got a post-lndustrial makeover. 
Otherwise....बंद बकवास

am8449

I would have more respect for India's protectionist laws if the government also prioritized welfare protections for their poor. As I understand it, their levels of income inequality are quite atrocious. With this in mind, their strict rules on foreign investments just seem to be for the benefit of their wealthy class.

tokyojimu

There are Samsung stores all over the place in India. Are they really building 30% of their product in India?

flaneur

cnocbui said:

slprescott said:

India is really pissing on Apple, expecially after the major financial commitments that Tim announced last week.

Moving forward....
Since the rule applies to "single-brand" stores, maybe Apple could modify its retail strategy in India to increase the emphasis on 3rd-party accessories.  Those accessories are not Apple-branded products.  Potentially Apple could create a retail model (just for India) that heavily includes Apple products, but also includes enough focus on the non-Apple products to fit legitimately in the multi-brand category.

That is a rather jaundiced viewpoint.  Apple have asked to dump used phones on the Indian market, and India has rightly said no to the proposal, which I think most countries would do that had local manufacturers of competing products who were actually investing in the local economy.

The store ruling is similar.  They have a rule that benefits the local economy that existed before Apple made their application.  Why should India make an exception for Apple?

A $10M investment in a facility working on maps is hardly major, and it isn't actually a case of Apple establishing an actual direct presence in India, their map venture is in reality more a case of them engaging a local Indian firm to do work for them.  If the proposed investment by Foxconn goes ahead, that certainly would be a lot more significant, but once again, Apple itself would still not have a direct presence in India, which I don't blame them for in the least, given the high-handedness of the Indian Judiciary and Tax department.  I don't think Tim Cook wants to be subpoenaed to appear in an Indian court, every time some minor local supplier thinks they have a grievance, which is what happened to the chairman of Samsung Electronics, Lee Kun-hee.  I wonder if the arrest warrant is still outstanding.

http://www.businessinsider.in/Tim-Cooks-first-visit-to-India-was-an-exploratory-mission-no-clear-cut-investment-agenda/articleshow/52386943.cms

Tim Cook said "hundreds of millions" in the Indian TV interview. It's probably going to be about more than Maps.