India asking for commitment on manufacturing before approving Apple Stores
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.
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
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.
Can't say I see that happening.
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.
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.