Prospect of Indian Apple Stores still on the table, minister says

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in General Discussion
Despite rejection by the country's finance minister, Apple still has a chance at opening stores in India in the near future, another high-level government official indicated on Monday.




The issue will be discussed with the finance ministry, commerce and industry minister Nirmala Sitharaman told reporters, according to Reuters. Last week, finance minister Arun Jaitley was said to have ratified a Foreign Investment Promotion Board ruling that Apple shouldn't be exempt from rules requiring foreign businesses with a single-brand store to source 30 percent of components from India.

"We took a line that we wouldn't mind waiving off the local sourcing norm for Apple's high-end products," Sitharaman told the media. "[The] finance ministry has taken a different line. We will talk to them."

If the finance ministry doesn't reverse course, launching Apple Stores in the country could require the intervention of Prime Minister Narendra Modi, who recently met with Apple CEO Tim Cook.

Given the company's wealth and influence, the Indian government likely has strong incentive to encourage Apple's presence. At the same time, however, part of Modi's political platform is the "Make in India" program, designed to spur local manufacturing. While Apple supplier Foxconn is hoping to build an Indian manufacturing facility, it won't be ready for some time even if it is approved.

Comments

  • Reply 1 of 18
    EsquireCatsEsquireCats Posts: 1,167member
    I can't help but think that cutting off significantly more advanced foreign technology for political ideals is more likely to make indian businesses less competitive. It's the luddites approach to technology.
    latifbpxamaxksecjbdragonjony0
  • Reply 2 of 18
    foggyhillfoggyhill Posts: 4,767member
    What did I say quid pro quo.. There is money to be made and one guy will blink... Sure of that... They always do.
    latifbp
  • Reply 3 of 18
    ksecksec Posts: 1,567member
    Do China block foreign import of Intel Chips? Instead hoping China will one day catch up with Intel on both architecture and Fab?

    The whole idea of 30% sourcing should be for Low End Commodity and High Volume Manufacturing. The whole point of Local Sourcing and some form of protectionism is to create MORE jobs for local.

    Sometimes you can just understand why India is still so Far behind China.
    jbdragon
  • Reply 4 of 18
    SpamSandwichSpamSandwich Posts: 33,408member
    Translation:  "We need more bribe money before we'll budge. Thanks in advance."
    jbdragonRayz2016
  • Reply 5 of 18
    9secondkox29secondkox2 Posts: 836member
    Very familiar with India.

    This is a total charade.

    Playing tough in public.

    In reality, India NEEDS this.

    Give these people good jobs and an ability to climb up. Especially the Dalit people.

    With Apple's human rights values, lets see them tackle the ridiculous caste system.
    edited May 2016 baconstangpacificfilmbadmonk
  • Reply 6 of 18
    apple ][apple ][ Posts: 9,233member
    India had better get their act together. 

    What was the purpose of Tim Cook's visit? For Apple to be rejected?

    Other countries can play hardball too, and we should begin penalizing all countries that have ridiculous rules, and we can come up with some rules of our own, designed to punish specific countries.

    If India is not going to be welcoming towards Apple, then how about no Foxconn factory, and that's just for starters. India needs Apple more than Apple needs India, and they should be a bit more accommodating towards Apple. 

    How many Americans emigrate to India each year, and how many Indians emigrate to the USA? I'm fairly certain that the figures are pretty damn lopsided.

    We can come up with our own percentages, limiting certain things that are Indian, and see how the finance minister of India likes that. And we will make no exceptions of course, just like he said of Apple.
    jbdragonbadmonk
  • Reply 7 of 18
    sailorpaulsailorpaul Posts: 318member
    Apple should offer to count as added value the intellectual property from the Indian-based Maps development unit.

    Then remind govt officials that getting more/keeping any of those jobs in India is tied to opening Apple stores in India
  • Reply 8 of 18
    Very familiar with India.

    This is a total charade.

    Playing tough in public.

    In reality, India NEEDS this.

    Give these people good jobs and an ability to climb up. Especially the Dalit people.

    With Apple's human rights values, lets see them tackle the ridiculous caste system.
    This is exactly what my younger sister said. 
    badmonk
  • Reply 9 of 18
    slprescottslprescott Posts: 763member
    Apple should offer to count as added value the intellectual property from the Indian-based Maps development unit.

    Then remind govt officials that getting more/keeping any of those jobs in India is tied to opening Apple stores in India
    Good suggestions.

    I suspect that Tim mentioned both of those points -- privately -- during his recent meetings with the Prime Minister and other govt. officials.
  • Reply 10 of 18
    anantksundaramanantksundaram Posts: 20,185member
    foggyhill said:
    What did I say quid pro quo.. There is money to be made and one guy will blink... Sure of that... They always do.
    Nonsense. There is no "one guy." It just says -- as some of us have pointed out fm the beginning -- that there are different views within different arms of the government about this issue, as you would expect in a democracy. Some of us have also regularly said that, when the dust settles, Apple will have won the discussion fairly and squarely, and not because "one guy blinked," but because that is the nature of debate and decision-making in an open democracy. 
    singularity
  • Reply 11 of 18
    anantksundaramanantksundaram Posts: 20,185member
    Very familiar with India.

    .......

    Give these people good jobs and an ability to climb up. Especially the Dalit people.

    With Apple's human rights values, lets see them tackle the ridiculous caste system.
    What "human rights values" do you refer to? The caste system is outright illegal in the country, just as discrimination on the basis of race is in the US. The country had one of the most aggressive (albeit, in my view, failed) affirmative action programs in the world for the traditionally lower castes. Does the similarity of either fact really mean that there is no racism in the US? 

    Since you say you're very very familiar with India, apparently, you might enlighten us?
    singularity
  • Reply 12 of 18
    anantksundaramanantksundaram Posts: 20,185member

    apple ][ said:
    India needs Apple more than Apple needs India, and they should be a bit more accommodating towards Apple. 
    How so? India actually needs something like Foxconn far more than it needs Apple. In fact, Apple should negotiate -- as I am guessing it is -- with the government to allow all Apple-related assembly from Foxconn to count towards its local sourcing rules.

    What "certain things" from India would you limit coming into the US? Who would do it on behalf of Apple? What is the process by which you would make it happen? If it's the highly educated visa category you're talking about, I don't think that's going to work very well, since it's as much a matter of demand for that talent as it's the willing supply. 
    singularity
  • Reply 13 of 18
    MarvinMarvin Posts: 14,513moderator
    It looks like the key to marketshare in India is the price. Samsung is the best-selling smartphone seller and they have a store locator:

    http://www.samsung.com/in/storelocator/

    Most of those stores have Yahoo and GMail email addresses so I'm guessing they aren't official stores. Maybe Apple can get some of the locals to setup knockoff Appel stores like in China.

    The following page has some info about smartphones in India:

    http://indianexpress.com/article/technology/mobile-tabs/india-inches-past-us-as-second-largest-smartphone-market-counterpoint/

    The best-selling smartphone is noted to be the ~$150 Samsung J2 and about 80% of phones in India are below this price:

    http://www.amazon.com/Samsung-Galaxy-Unlocked-Quad-Core-Smartphone/dp/B0170CX76O

    Apple being able to sell refurbs in India is the only way they can get the price down anywhere near that. They would take iPhones from the upgrade program and sell them on again at just over half the price. They can probably get into the $200-300 price bracket that way. But India puts import fees on used goods up to 3x the price. Tim Cook tried to tell them that Apple's refurbs were as good as new but if they make exceptions for one company, it would extend to other companies, even beyond smartphones.

    The iPhone SE is the only way Apple can go just now but is still about 3-4x the price of the Samsung J2 and the J2 has a 4.7" screen. Apple can't design a cheap iPhone just for India because they'll end up being exported and they'd have to drop the quality down.

    There are still other countries to tackle:

    https://blog.jana.com/2015/09/10/apple-cant-touch-androids-market-share-in-emerging-markets/

    Brazil and Indonesia should be able to benefit from refurbs and the upgrade programs if they don't impose restrictions like India. India is close to a non-existant market for Apple just now with 2-3 million iPhones per year. Ideally they'd want to be selling 20-30m units but they can get that growth elsewhere.
    stevenoz
  • Reply 14 of 18
    anantksundaramanantksundaram Posts: 20,185member
    PED has an excellent piece today on why the headlines on this topic are utter bogus (as are a number of the comments here): http://ped30.com/2016/05/31/apple-headlines-india-bogus/

    He includes in it the example of the utterly misleading AI headline from a day or two ago: Indian government publicly rejects Apple's desire to sell used iPhones

    C'mon, AI, you can do better.
    edited May 2016
  • Reply 15 of 18
    Very familiar with India.

    This is a total charade.

    Playing tough in public.

    In reality, India NEEDS this.

    Give these people good jobs and an ability to climb up. Especially the Dalit people.

    With Apple's human rights values, lets see them tackle the ridiculous caste system.
    Caste is tied to culture, not policy. Hence, it can't be eliminated by government decree, even though the government tries. Most Indians publicly reject caste, but will still very often only marry within their own caste, and businesses will still only higher people of certain caste into certain positions.
    edited May 2016
  • Reply 16 of 18
    Apple should offer to count as added value the intellectual property from the Indian-based Maps development unit.

    Then remind govt officials that getting more/keeping any of those jobs in India is tied to opening Apple stores in India
    Apple's move to open development centers in India is a very smart move, and good for India. It's a good place to negotiate with the Indian government regarding  the 30% rule. Apple likely won't build factories in India, but if they could expand software development here, it would have a double benefit: for Apple, it increases Indians' access to Apple's ecosystem, with software tailored for the Indian market, possibly even expanding to the point where some of Apple's software products could be developed entirely in India, and exported to the rest of the world. This would be good for India, because it would employ Indians in high-end software development, and possibly slow India's brain-drain.
  • Reply 17 of 18
    apple ][ said:
    We can come up with our own percentages, limiting certain things that are Indian, and see how the finance minister of India likes that. And we will make no exceptions of course, just like he said of Apple.
    India has a lot to gain by Apple's expansion, as does Apple. I don't think Apple has enough pull in the US government to make them impose trade tariffs on Indian imports just so that Apple could expand into the Indian market and bypass the 30% restriction. The US government has no incentive to play the tit-for-tat game on Apple's behalf. To even try would offend the sensibilities of the finance minister, and he would only dig his heels in further.
    India can be incentivized, but it can't be bullied. If Apple can come up with some strategies that the Indian government would see as benefits for India, then they might consider loosening some restrictions. Bringing the US government into it to try and bully/cajole/manipulate would be a terrible idea.
    anantksundaram
  • Reply 18 of 18
    This could be a big win for Apple and India.
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