India could exempt Apple Stores from local sourcing rules for 2-3 years - report

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in General Discussion
An idea allegedly being floated by the Indian government could make proposed Apple Stores exempt from local sourcing regulations, but only for two to three years, according to a new report




Talks between the finance ministry and the Department of Industrial Policy and Promotion are already underway, in which the 2-3 year exemption has been raised as a possibility, according to Times of India sources. Recently, finance minister Arun Jaitley shot down the idea of a blanket exemption based on Apple's selling of "cutting-edge technology."

Regulations normally require that foreign firms setting up a single-brand retail store source at least 30 percent locally. Although Apple reportedly informed the government that it's beginning to buy chargers from India, the rest of the company's supply chain operates elsewhere.

Foxconn, at least, is hoping to build an Apple-focused manufacturing complex, which could conceivably start operations before the proposed time limit is up.

Last week commerce and industry minister Nirmala Sitharaman told reporters that she would speak to the finance ministry about the matter. If the earlier decision isn't reversed, Apple's only hope for launching Apple Stores in the near future could be personal intervention by Prime Minister Narendra Modi, who recently met with Apple CEO Tim Cook.

Comments

  • Reply 1 of 19
    thewhitefalconthewhitefalcon Posts: 4,453member
    Hold out for more. Don't give in to the protectionists.  
    jbdragonmonstrositylatifbp
  • Reply 2 of 19
    slprescottslprescott Posts: 763member
    I wonder if this was negotiated privately during Tim's trip, and the public pronouncements since then have simply been a drama that both sides agreed to let play out, for domestic PR reasons.
    edited June 2016 schlacklatifbp
  • Reply 3 of 19
    SpamSandwichSpamSandwich Posts: 33,408member
    Nothing Cook has done so far has managed to excite Wall Street manipulators, so whatever is the India strategy for Apple, the result will be a flatline until Apple can dominate a new market or product category completely for 3-5 years.
    edited June 2016 latifbp
  • Reply 4 of 19
    schlackschlack Posts: 708member
    I understand why India doesn't want to be pillaged by a foreign company. They need all the money to stay in their economy. At the same time, it's impractical for Apple to manufacture in every country where it sells its products. A nice alternative would be for Apple to become a social leader for change in India and to put a significant portion of its India profit towards creating jobs and better standards of living in India...or towards paying India employees substantially more than market rates.
  • Reply 5 of 19
    SpamSandwichSpamSandwich Posts: 33,408member
    schlack said:
    I understand why India doesn't want to be pillaged by a foreign company. They need all the money to stay in their economy. At the same time, it's impractical for Apple to manufacture in every country where it sells its products. A nice alternative would be for Apple to become a social leader for change in India and to put a significant portion of its India profit towards creating jobs and better standards of living in India...or towards paying India employees substantially more than market rates.
    Bribery yields limited results, then those bribed start demanding more. The only way Apple makes significant inroads in India, in my opinion, will happen when Apple licenses iOS to the crap-phone market as Google has done. If Apple pivots away from dependence on iPhone revenue and toward Apple Car revenue, they'd have greater flexibility with their options. The high end phone market appears to have peaked for now.
    edited June 2016
  • Reply 6 of 19
    TempletonTempleton Posts: 84member
    Hope TC's efforts bear fruit. Good sign. Firm believer in rumors. Sometimes.
  • Reply 7 of 19
    jbdragonjbdragon Posts: 2,245member
    schlack said:
    I understand why India doesn't want to be pillaged by a foreign company. They need all the money to stay in their economy. At the same time, it's impractical for Apple to manufacture in every country where it sells its products. A nice alternative would be for Apple to become a social leader for change in India and to put a significant portion of its India profit towards creating jobs and better standards of living in India...or towards paying India employees substantially more than market rates.
    Bribery yields limited results, then those bribed start demanding more. The only way Apple makes significant inroads in India, in my opinion, will happen when Apple licenses iOS to the crap-phone market as Google has done. If Apple pivots away from dependence on iPhone revenue and toward Apple Car revenue, they'd have greater flexibility with their options. The high end phone market appears to have peaked for now.
    There is no way Apple will ever license iOS.  That would kill the iPhone and kill profits faster then anything else you could think of.  Apple tried that in the past with the Mac and allowed Mac clones and it almost killed Apple!!!. Steve Jobs came back and killed all that. 


    There is no point making Mullins of phones just to be the market leader if all you're doing is breaking even which is whats going on with Android! Even if the high end market has perked, and I don't think it has, that's no excuse to kill yourself with low end, zero profit phones, let alone showing iOS clones.  Taking about dumb.

    mwhiteRayz2016patchythepirateanton zuykov
  • Reply 8 of 19
    SpamSandwichSpamSandwich Posts: 33,408member
    jbdragon said:
    Bribery yields limited results, then those bribed start demanding more. The only way Apple makes significant inroads in India, in my opinion, will happen when Apple licenses iOS to the crap-phone market as Google has done. If Apple pivots away from dependence on iPhone revenue and toward Apple Car revenue, they'd have greater flexibility with their options. The high end phone market appears to have peaked for now.
    There is no way Apple will ever license iOS.  That would kill the iPhone and kill profits faster then anything else you could think of.  Apple tried that in the past with the Mac and allowed Mac clones and it almost killed Apple!!!. Steve Jobs came back and killed all that. 


    There is no point making Mullins of phones just to be the market leader if all you're doing is breaking even which is whats going on with Android! Even if the high end market has perked, and I don't think it has, that's no excuse to kill yourself with low end, zero profit phones, let alone showing iOS clones.  Taking about dumb.

    The point was that India is a market dominated by Android, which is dominated by cheap product. THAT'S the Indian market. The point went whooshing over your melon.
  • Reply 9 of 19
    anantksundaramanantksundaram Posts: 20,185member
    Bribery yields limited results, then those bribed start demanding more. The only way Apple makes significant inroads in India, in my opinion... blah blah...
    Cut your vacuous bullshit. Who's 'bribing' whom?
  • Reply 10 of 19
    anantksundaramanantksundaram Posts: 20,185member
    I predict that, while it might be a bumpy road, this will all work out fine in the end.

    The Indian cell phone market grew at 25% last year. While that will slow (since the country has a billion cell phones at this point), given the recent arrival of LTE, smartphone growth will be even faster than that number for the foreseeable future. Apple currently has only 2% of the share, implying that Apple's growth could be even faster than the rest of the smartphone market.

    It is the last market of any stock price-moving consequence left for the iPhone. The only question is how and how fast Apple makes it happen, not if/when.
    edited June 2016
  • Reply 11 of 19
    maestro64maestro64 Posts: 4,943member
    sog35 said:
    jbdragon said:
    There is no way Apple will ever license iOS.  That would kill the iPhone and kill profits faster then anything else you could think of.  Apple tried that in the past with the Mac and allowed Mac clones and it almost killed Apple!!!. Steve Jobs came back and killed all that. 


    There is no point making Mullins of phones just to be the market leader if all you're doing is breaking even which is whats going on with Android! Even if the high end market has perked, and I don't think it has, that's no excuse to kill yourself with low end, zero profit phones, let alone showing iOS clones.  Taking about dumb.

    The point was that India is a market dominated by Android, which is dominated by cheap product. THAT'S the Indian market. The point went whooshing over your melon.
    People said the same thing about China 5 years ago. Just wait till LTE is built in India.  There really is no reason to buy an expensive phone like the iPhone in India right  now because of lack of LTE.  But once its built out (like China the last 3 years) you will see a ton of iPhone growth in India.

    Don't tell me the India culture is 100% different from the rest of the world. All people want quaity and the best goods they can afford. 

    As a person who has worked (last 20 yrs) with people from this culture, whether born there or born in the US, one thing most all of them have in common, is the fact they do not want to pay what something is worth, let alone consider the quality and value as the driving factor in a  purchase. They some how think they are negotiating, but in reality they are just cheap, I would not even say frugal. They are really good at justifying their cheap decisions, especially in the work place. I seen really bad business decision being made because they claimed they negotiate a lower price only to find out later they only got what they paid for which was a lesser product than what was needed.

    India is not going to be like China; One they do not have a single authority making decisions for the entire country, i.e the finance minister making different decisions than another part of the country which is counter to each other. Over half the people live in poverty and the ones who are not living in poverty are doing everything they can to make sure the other half never succeed. They lack investment in their infrastructure, China spent 30 yeas and $100's B on putting in roads and unified electrical and communications systems. India is not spending money on infrastructure at a rate which will make a different. India will never do what China did which is to display people to ensure public work project will be successful. Lastly India does not have the same work ethics you see in China, China does everything they can to make sure everyone in China can have a job.

    badmonk
  • Reply 12 of 19
    It's interesting how fair trade only works one way. Places like India want access to markets so their low paid people can do the work of others, but when someone wants access to their market, the shutters stay up.
  • Reply 13 of 19
    anantksundaramanantksundaram Posts: 20,185member
    maestro64 said:
    sog35 said:
    People said the same thing about China 5 years ago. Just wait till LTE is built in India.  There really is no reason to buy an expensive phone like the iPhone in India right  now because of lack of LTE.  But once its built out (like China the last 3 years) you will see a ton of iPhone growth in India.

    Don't tell me the India culture is 100% different from the rest of the world. All people want quaity and the best goods they can afford. 

    As a person who has worked (last 20 yrs) with people from this culture, whether born there or born in the US, one thing most all of them have in common, is the fact they do not want to pay what something is worth, let alone consider the quality and value as the driving factor in a  purchase. They some how think they are negotiating, but in reality they are just cheap, I would not even say frugal. They are really good at justifying their cheap decisions, especially in the work place. I seen really bad business decision being made because they claimed they negotiate a lower price only to find out later they only got what they paid for which was a lesser product than what was needed.

    India is not going to be like China; One they do not have a single authority making decisions for the entire country, i.e the finance minister making different decisions than another part of the country which is counter to each other. Over half the people live in poverty and the ones who are not living in poverty are doing everything they can to make sure the other half never succeed. They lack investment in their infrastructure, China spent 30 yeas and $100's B on putting in roads and unified electrical and communications systems. India is not spending money on infrastructure at a rate which will make a different. India will never do what China did which is to display people to ensure public work project will be successful. Lastly India does not have the same work ethics you see in China, China does everything they can to make sure everyone in China can have a job.

    I am quite sorry to hear that has been your experience with India and Indians. However, it's one data point.

    My experience has been quite the opposite to yours. Indians have an excellent sense of worth and quality, but tend to be frugal. They are no different from almost any other place where I've seen business done, in that they negotiate a lower price for everything. In fact, nowhere else have I seen a 'Walmart' mentality -- beat you down for costs and quality be damned -- more than in the US. Yes, India's infrastructure is poor compared to China's, but most Indians I know are quite proud to -- and would rather -- live in a rambunctious, free-wheeling, democracy with minority protection and a free press (by emerging market standards). Moreover, the 'soft' infrastructure (as opposed to the 'hard' infrastructure which is apparently what you have in mind) is head-and-shoulders above that of a country like China. The work ethic is quite good in my opinion, and if there's any place where I am seeing a precipitous decline on that front, again, it's here in the US. And, I've been here in the US for nearly 35 years, so arguably, I know the US better than you do India.

    Mine is also just one data point.
    edited June 2016 latifbp
  • Reply 14 of 19
    anton zuykovanton zuykov Posts: 1,056member
    Bribery yields limited results, then those bribed start demanding more. The only way Apple makes significant inroads in India, in my opinion, will happen when Apple licenses iOS to the crap-phone market as Google has done.
    A very bad idea. iOS is known for its stability and quality of experience. That is not due to some magic, but because iDevice-iOS hardware-software pair was carefully engineered to match very well. Slapping iOS on some shitty Android-like $100 phone will yield absolutely terrible results. That should not be done and never will be done (for good).
    edited June 2016
  • Reply 15 of 19
    anton zuykovanton zuykov Posts: 1,056member

    The point was that India is a market dominated by Android, which is dominated by cheap product...The point went whooshing over your melon.
    Hardly. If there is a market, dominated by cheaper products, that doesn't mean you need to get into that tight spot as well by bringing prices of your products down. That is the last thing you wanna do.
    Instead, you would create a new market segment with a product offering something different (just like Apple did it many times). 
    Time will tell, but there aren't that many companies that operate like Apple with the success that Apple has, which indicates, they know what they are doing (unlike the majority of companies).
    On the other hand, the majority of ordinary people have no idea, what they are talking about when they try to understand how Apple does its thing. 
    And when some suggestion, comes from those people on HOW Apple really SHOULD do its thing, that is not even funny.
  • Reply 16 of 19
    This is interesting if true...
  • Reply 17 of 19
    FatmanFatman Posts: 513member
    India needs to catch up to the rest of the world -- currently, their best and brightest are leaving the country. If this report is accurate, the Indian government is smart to give their citizens access to best in class, leading technologies in their home country. If they shut these tech companies out - or severely restrict their ability to do business in India - they risk keeping their citizens in the dark ages and their citizens fleeing for better access and opportunities in other countries.
    latifbp
  • Reply 18 of 19
    latifbplatifbp Posts: 544member
    sog35 said:
    The point was that India is a market dominated by Android, which is dominated by cheap product. THAT'S the Indian market. The point went whooshing over your melon.
    People said the same thing about China 5 years ago. Just wait till LTE is built in India.  There really is no reason to buy an expensive phone like the iPhone in India right  now because of lack of LTE.  But once its built out (like China the last 3 years) you will see a ton of iPhone growth in India.

    Don't tell me the India culture is 100% different from the rest of the world. All people want quaity and the best goods they can afford. 
    Agree... Even if the people are all frugal Frannies like is being said, if Apple pushes market share minimally to 6-8% they'll still be raking in a bunch of cash...
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