India asking for commitment on manufacturing before approving Apple Stores

Posted:
in General Discussion edited June 2016
The Indian government is aiming to get a firm commitment from Apple on local manufacturing before authorizing the launch of any Apple Stores in the country, a report said on Monday.




If Apple can announce a timeframe for local manufacturing plans, India could loosen policies on local sourcing, a senior government official told Bloomberg. The country's Finance and Commerce Ministries are said to be in talks about adjustments to accommodate Apple, which could include not just a launch without active factories but the ability to use partners like Foxconn, which is already said to be planning an Apple-oriented factory.

Current rules require foreign firms operating single-brand stores to source at least 30 percent of goods or components locally. As it stands that would be a problem for Apple, which has only one factory of its own -- a Mac facility in Ireland -- and just recently started buying chargers from India.

Exceptions can be granted, but last month Finance Minister Arun Jaitley ratified a Foreign Investment Promotion Board decision waiving that possibility. That led Commerce and Industry Minister Nirmala Sitharaman to initiate talks with the Finance Ministry, hoping to reverse the situation.

Apple needs first-party stores to help make inroads into India, a place it has identified as a growth market even though the vast majority of people there can't afford an iPhone -- most phones sold in the region cost less than $150. As a result the company controls about 2 percent of Indian phone market, though it's counting on a growing middle class to improve its success.

Comments

  • Reply 1 of 14
    The Indian government cannot be trusted. Apple should hold out for more. 
    latifbp
  • Reply 2 of 14
    macapfelmacapfel Posts: 495member
    Is this really all we have for rumours 1h before kickoff?  I miss the old days. 
  • Reply 3 of 14
    Loosening policies might as well lead to a bigger share in the Indian market as far as Apple is concerned. Quite an interesting post!
  • Reply 4 of 14
    LoneStar88LoneStar88 Posts: 278member
    I wonder if these Indian bureaucrats realize the potential boost to India's "app economy" by Indian Apple app development companies creating jobs, not just manufacturing jobs, as an important benefit and side effect from Apple selling a lot more products through its Indian retail stores.
    edited June 2016 jbdragon
  • Reply 5 of 14
    Should be easy if true. What better advertisement then a factory with good wages?
  • Reply 6 of 14
    melgrossmelgross Posts: 31,262member
    The truth is that India sucks as a country to do business in. The regulations for building plants are difficult to work with. The corruption there is very high, both on the state and national level. India is very focused on having local production, preferably with Indian companies. But they make that difficult.

    i have a professional range (stove). It's made by a company called Dynamic Cooking Systems, DCS. They were bought by another company, A few years ago. This company makes professional ovens and other products for the home, and commercial ones for restaurants. It was founded by an Indian engineer who has a degree in combustion engineering. He invented the automatic gas starter that most stoves use today.

    when he first wanted to start a stove manufacturing company in India, he found that the morass of regulations, and the corruption were unbeatable. He gave up after some time and came here. Here, he was very successful.

    one reason why we have so many Indians running, and starting businesses over here, is because it's so difficult to do there. And yes, I know that there are plenty of Indian businesses. But many of the brightest and best have come here.

    apple wants to build stores that will cost, over some years, well over $100 million. All of that money will be spent there, using local construction companies and materials. That will boost the economy too. And they will hire several thousand people, long term. India should encourage that, not make it almost impossible.

    besides the problems already mentioned is the problem of lack of infrastructure. Unlike China, India has not spent the money to significantly improve roads or power generation. Many areas, including manufacturing districts have highly unreliable power. There isn't a major technical network of suppliers for local materials or part manufacturing either. This is a difficult country to work in. Not impossible, but much more difficult that China, or Mexico, or even Vietnam.

    the government needs to drop many of its restrictions towards foreign ownership, and loosen up its rules for business overall. Then, if the endemic corruption could be lessened, things would get better.
    latifbpradiospacejbdragonbadmonk
  • Reply 7 of 14
    cnocbuicnocbui Posts: 3,613member
    The Indian government cannot be trusted. Apple should hold out for more. 
    What do you mean by that?  I would have thought it's fairly binary.  Are you expecting the Indian government, after Apple has established some manufacturing there, to say 'ha, ha, sucked in, no you can't spend more money and build your stores?'

    Can't say I see that happening.
  • Reply 8 of 14
    cnocbuicnocbui Posts: 3,613member
    sog35 said:
    go to hell India.

    Apple opening Apple stores will add thousands of high quality jobs to the economy
    High quality jobs?  What a load of bull manure.  Crappy retail basic wage jobs just like in every Apple store in the world is what you would offer.   Would Austin be better off if Samsung had just established a few Samsung stores rather than one of the largest leading-edge chip fabs in the world?
    edited June 2016 singularity
  • Reply 9 of 14
    Why you guys saying " Go to hell India " Your all gadgets working on specific software . Most of them created in India . There is no soul (Software ) in your gadgets it just act like a dead body . I agreed the corruption there is very high thats really slowing down the growth of that country . I heard that lot of good people hardly trying to stop corruption like there Prime minister Modi .
  • Reply 10 of 14
    melgrossmelgross Posts: 31,262member
    cnocbui said:
    sog35 said:
    go to hell India.

    Apple opening Apple stores will add thousands of high quality jobs to the economy
    High quality jobs?  What a load of bull manure.  Crappy retail basic wage jobs just like in every Apple store in the world is what is you would offer.   Would Austin be better off if Samsung had just established a few Samsung stores rather than one of the largest leading-edge chip fabs in the world?
    In India, those are high quality jobs. What's the average Indian worker make a year? What benefits do they get? I had a couple of doctors from India working for me here, because they couldn't get a decent job in India. They were processing film for me. What does that say about the country?
  • Reply 11 of 14
    melgrossmelgross Posts: 31,262member
    Why you guys saying " Go to hell India " Your all gadgets working on specific software . Most of them created in India . There is no soul (Software ) in your gadgets it just act like a dead body . I agreed the corruption there is very high thats really slowing down the growth of that country . I heard that lot of good people hardly trying to stop corruption like there Prime minister Modi .
    Some of are not saying that. What I'm saying is that India is a very difficult place to do business with, and that's true. I'd love to see iPhones, iPads, and other Apple products made there. I'd love to see them made there more than in China, where, as we can see, the government has no problem putting obstacles in front of foreign companies in ways that India isn't likely to do once they're there.

    but the regulations, corruption and lack of infrastructure is real.

    and while India has a large programming population, it's not true that most software we use is done there. And the concepts behind the software doesn't originate in India. It's just the coders that work there. The ideas are from outside.
  • Reply 12 of 14
    cnocbuicnocbui Posts: 3,613member
    sog35 said:
    cnocbui said:
    High quality jobs?  What a load of bull manure.  Crappy retail basic wage jobs just like in every Apple store in the world is what is you would offer.   Would Austin be better off if Samsung had just established a few Samsung stores rather than one of the largest leading-edge chip fabs in the world?
    having an Apple retail job isn't crappy. Especially in India where wages are very low.

    Apple is bringing nice jobs and this is how India treats them? Pathetic.  India's protectionism policies are only hurting the common citizen in India, not helping.
    Come off it.  It's a retail sales job and will be paid at the local going rate in India, not the going rate in New York.  That local going rate isn't going to be the same as the going rate for civil, mechanical and software engineers, now is it?

    Are Apple retail positions considered 'nice' jobs in the US?  I get the impression they not very well paid by US standards and it would be hard to live off them as a primary cource of income.  India has the right approach, which is quid pro quo.
    singularitybadmonk
  • Reply 13 of 14
    This could be a win-win, the real gem is getting goods made in India, for India and for Apple, they control the customer experience rather than leaving it to local representation which may or may not portray Apple the way Apple wants to be viewed. We'll have to see.
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