Indian government publicly rejects Apple's desire to sell used iPhones

Posted:
in iPhone
Despite a recent trip by Apple Chief Executive Tim Cook to meet with local officials, the Indian government on Monday announced that it will not allow the company to sell refurbished iPhones in its country.




India's minister of commerce and industry, Nirmala Sitharaman, held a press conference on Monday to announce the government had rejected Apple's request, according to Live Mint. Apple had been hoping to gain traction in the emerging market by selling more affordable, refurbished iPhones.

"We are not in favor of any company selling used phones... however certified they may be," Sitharaman said.

It's been a rough few weeks for Apple in India, where its plans have been met with resistance from local officials. Last week, the country's finance minister reiterated that Apple must source at least 30 percent of its components locally, if it hopes to open retail outlets in India.

Sitharaman also commented on the retail issue in Monday's press conference, saying that although the government might be open to waiving the 30 percent requirement, the finance ministry "has taken a different position." Sitharaman said she and the finance ministry will continue to consider the issue.

The rejections come on the heels of Apple Chief Executive Tim Cook's own trip to India, where he took in local sighs and met with officials, including Prime Minister Narendra Modi. Coinciding with the visit, Apple announced it will open an iOS design and development accelerator in the country in 2017, while the company also launched a Maps development center in the town of Hyderabad.
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Comments

  • Reply 1 of 51
    irelandireland Posts: 17,751member
    The store rule is totally ridiculous.
    calilatifbpmagman1979
  • Reply 2 of 51
    gatorguygatorguy Posts: 23,162member
    ireland said:
    The store rule is totally ridiculous.
    At least the sourcing rule is applied fairly (?) across the board and other companies can request waivers. From the AI source article:

    "Xiaomi which had earlier sought waiving the 30% local sourcing norm has now written to the department, saying it does not need the waiver as it has started manufacturing in India. However, the proposal is to be sent to the finance ministry, he added.

    Another Chinese mobile company LeEco has also sought a waiver of the 30% sourcing norm."

  • Reply 3 of 51
    anantksundaramanantksundaram Posts: 20,223member
    Honestly, I am failing to see why this spat about used phones such a big deal on all sides. Really, do we think that this is somehow the centerpiece of Apple's long term entry and growth strategy into the seventh largest -- and one of the fastest growing -- economies in the world?
  • Reply 4 of 51
    anantksundaramanantksundaram Posts: 20,223member
    ireland said:
    The store rule is totally ridiculous.
    It may be, but the rules are what they are, and it applies to everyone equally. This is the reality of doing business globally. Rules tend to different in different places. 
    chiagatorguycnocbui
  • Reply 5 of 51
    MacProMacPro Posts: 19,379member
    I have no idea and am just asking.  Does Europe and the USA have the same or similar reciprocal conditions with Indian products in our trade deals?
  • Reply 6 of 51
    sreesree Posts: 139member
    ireland said:
    The store rule is totally ridiculous.

    Not for India. 

    There are a lot of rules in this world that look ridiculous to outsiders, but might not be so from a different perspective.

    Take for example, the spouse's of H1-B visa holders in the US not being allowed to work anywhere. Isn't that exactly the opposite of wanting women's lib? seriously, what are the poor wives of these workers supposed to do, just sit at home and cut carrots? I know proper working women who had to cut short their careers just to support their husband's career. Its ridiculous but it is the law of the land in the USA.
    messagepad2100xamax
  • Reply 7 of 51
    anantksundaramanantksundaram Posts: 20,223member
    I have no idea and am just asking.  Does Europe and the USA have the same or similar reciprocal conditions with Indian products in our trade deals?
    No. One of the key principles of international trade rules and laws (most of which the US is signatory to, as is India) is the 'most-favored nation' clause: it says that countries cannot discrimate among their trading partners. If you grant or take away a special favor to someone, you must do it to all. 

    (Add: As an aside, this is why the granting of MFN to China some years ago was such a big deal). 
    edited May 2016
  • Reply 8 of 51
    gatorguygatorguy Posts: 23,162member
    I have no idea and am just asking.  Does Europe and the USA have the same or similar reciprocal conditions with Indian products in our trade deals?
    The US is a mature economy as is most of Europe. India is still trying to develop theirs so I personally think I understand the rationale behind the 30% sourcing rule.

    Notice that both Xiaomi and Samsung are reported to have invested in plant and equipment along with local hiring just to sell to the Indian market. Hundreds/thousands of other companies have probably done the same. There's advantages to their economy when manufacturing facilities are built within the borders and use India labor isn't there, one of the biggies being that less of India's spending gets sent out of the country. They're relatively poor unlike the US and Europe. 
    edited May 2016 singularity
  • Reply 9 of 51
    TempletonTempleton Posts: 84member
    Sell another product made in India in the stores to satisfy rule.
    jroy
  • Reply 10 of 51
    sreesree Posts: 139member
    I have no idea and am just asking.  Does Europe and the USA have the same or similar reciprocal conditions with Indian products in our trade deals?
    No. One of the key principles of international trade rules and laws (most of which the US is signatory to, as is India) is the 'most-favored nation' clause: it says that countries cannot discrimate among their trading partners. If you grant or take away a special favor to someone, you must do it to all. 

    (Add: As an aside, this is why the granting of MFN to China some years ago was such a big deal). 
    That is a little too simplistic, since there are a bunch of regional treaties like NAFTA and the EU that act against the interests of countries like India. Also, the WTO/IMF itself is mostly bullied by the big boys (US/EU and now china) and so in general these policies are biased against countries like india.
    jroymessagepad2100airbubble
  • Reply 11 of 51
    wigbywigby Posts: 692member
    Honestly, I am failing to see why this spat about used phones such a big deal on all sides. Really, do we think that this is somehow the centerpiece of Apple's long term entry and growth strategy into the seventh largest -- and one of the fastest growing -- economies in the world?
    Yes. Tim Cook said India is going to be China in 10 years. So the have some time but they have to start now.
  • Reply 12 of 51
    calicali Posts: 3,494member
    Apple just acquire India already.
    edited May 2016 xamax
  • Reply 13 of 51
    mac_128mac_128 Posts: 3,454member
    They held a press conference to announce they were turning Apple down!? Seems like they were sticking it to them. Just send Tim Cook a letter. India must still be upset about whatever Steve Jobs did when he was backpacking across India in the 70s to find himself.
    jroymessagepad2100cali
  • Reply 14 of 51
    bobschlobbobschlob Posts: 1,074member
    gatorguy said:

    Notice that both Xiaomi and Samsung are reported to have invested in plant and equipment along with local hiring just to sell to the Indian market. Hundreds/thousands of other companies have probably done the same. There's advantages to their economy when manufacturing facilities are built within the borders and use India labor isn't there, one of the biggies being that less of India's spending gets sent out of the country. They're relatively poor unlike the US and Europe. 
    Saying Apple late to the party again?
  • Reply 15 of 51
    gatorguygatorguy Posts: 23,162member
    bobschlob said:
    gatorguy said:

    Notice that both Xiaomi and Samsung are reported to have invested in plant and equipment along with local hiring just to sell to the Indian market. Hundreds/thousands of other companies have probably done the same. There's advantages to their economy when manufacturing facilities are built within the borders and use India labor isn't there, one of the biggies being that less of India's spending gets sent out of the country. They're relatively poor unlike the US and Europe. 
    Saying Apple late to the party again?
    Is that what you think? Seems there's a lot of smartphones yet to be sold in India and lots of room for whoever makes it a priority to market to them. I personally don't think anyone is "late" but opinions probably differ.
    singularitylord amhran
  • Reply 16 of 51
    anantksundaramanantksundaram Posts: 20,223member
    sree said:
    No. One of the key principles of international trade rules and laws (most of which the US is signatory to, as is India) is the 'most-favored nation' clause: it says that countries cannot discrimate among their trading partners. If you grant or take away a special favor to someone, you must do it to all. 

    (Add: As an aside, this is why the granting of MFN to China some years ago was such a big deal). 
    That is a little too simplistic, since there are a bunch of regional treaties like NAFTA and the EU that act against the interests of countries like India. Also, the WTO/IMF itself is mostly bullied by the big boys (US/EU and now china) and so in general these policies are biased against countries like india.
    Yes, but the RTA exception is inapplicable in this situation. I was merely referring to what's relevant to @digitalclip's question.
    edited May 2016
  • Reply 17 of 51
    India's economy is highly unregulated. There is little to no enforcement of trademarks or copyrights. You can buy bootleg movies and software on the street, openly, with no fear of prosecution. So why this focus on used iphones?Focusing on enforcing a law in this one particular instance illustrates lack of the rule of law which is the biggest hinderance to investment in third world countries.

     If India wants to join the first world they have to avoid protectionist reactionism and consistently enforce impartial laws that do not favor local industry over international companies. Why do you think India has such a huge brain drain the the US? Because there are far greater opportunities here--companies can invest without the fear that the government with come after them with a grudge.
    edited May 2016
  • Reply 18 of 51
    bobschlobbobschlob Posts: 1,074member
    gatorguy said:
    bobschlob said:
    Saying Apple late to the party again?
    Is that what you think? Seems there's a lot of smartphones yet to be sold in India and lots of room for whoever makes it a priority to market to them. I personally don't think anyone is "late" but opinions probably differ.
    Thought OP was regarding Apple Stores. If I understood; you said Xiaomi  and Samsung have built manufacturing plants in India, and therefor can have stores there. Apple (yet) has not, and therefor cannot. i.e. "late".
    Or did I misunderstand?
  • Reply 19 of 51
    foggyhillfoggyhill Posts: 4,767member
    Isn't that the third article saying the exact same thing; the Indian government recycling talking points for the environment?
  • Reply 20 of 51
    foggyhillfoggyhill Posts: 4,767member
    ireland said:
    The store rule is totally ridiculous.
    It may be, but the rules are what they are, and it applies to everyone equally. This is the reality of doing business globally. Rules tend to different in different places. 
    The rules of doing business globally (and internally) is quid pro quo and influence peddling, not fairness.
    Its the same to various degrees everywhere, but especially in countries with opaque, large and complex bureaucracies.
    .
    Protectionists policies are rarely if ever fair;
    if there were, they would be no need to make a show of turning down Apple and scmoozing the political establishment would make no difference either.

    Apple I thought had scratched enough backs to get something but it seems they haven't applied to right incentive yet (yep, that's how it really goes there and most everywhere).

    edited May 2016
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