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Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods

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Re: Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods

#21

Post by School-Cotton »

9mit3t2m9h9a wrote: post #17
fleitz wrote: post #5

Earlier quoted context omitted.

India is heavily invested in protectionism, that's the primary issue, the exemption is in place because it was clear no one was going to make smart phones there.

Well, given Micromax exists and has manufacturing (and HQ) in India, now Indian government can say that smartphones are not cutting-edge high-tech per se.

Just like Apple in China, I'm betting all Micromax does in India is assemble phones from high-tech subparts that were made in Korea, Taiwan, and the United States.

Not sure whether this is relevant because I'm not sure exactly what counts towards the "30%" figure.

Re: Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods

#22

Post by pcurve »

ikeboy wrote: post #20
pcurve wrote: post #19

Earlier quoted context omitted.

At least 30 per cent of the value of procurement of manufactured/processed products shall be sourced from Indian small industries. So for high margin product like iphone, they're going to base it on cost of good or (materials). There's probably some fudging room.

For each product? You can't sell any product unless 30% of it was made in India?

oh no definitely not. For company product aggregate.

http://www.franchisetimes.com/May-2015/How-Indias-investment...

'All multi-brand retail operations with FDI must be locally sourced with at least 30 percent of the value of manufactured/processed products from Indian “small industries,” which have a total investment in plant and machinery not exceeding U.S. $1 million. '

Quite a tall order still.

Re: Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods

#23

Post by ikeboy »

pcurve wrote: post #22
ikeboy wrote: post #20

Earlier quoted context omitted.

For each product? You can't sell any product unless 30% of it was made in India?

oh no definitely not. For company product aggregate. http://www.franchisetimes.com/May-2015/How-Indias-investment... 'All multi-brand retail operations with FDI must be locally sourced with at least 30 percent of the value of manufactured/processed products from Indian “small industries,” which have a total investment in plant and machinery not exceeding U.S. $1 million. ' Quite a tall order still.

But then how can you know how much will sell ahead of time?

Suppose I have exactly two products, one fully sourced from India, one sourced elsewhere. The legality depends on whether the first sells more than a 7:3 ratio over the second, which can't be determined before actually selling.

Re: Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods

#24

Post by shas3 »

alistairSH wrote: post #7
justinlardinois wrote: post #3

> Apple was expected to receive an exemption from the rule, earning a recommendation from country's Department of Industrial Policy and Promotion, but the ministry of finance has decided Apple's products do not fall into the cutting-edge technology category. A source told Reuters Apple did not provide enough material to justify the exemption. So did Apple just submit a crappy application? Or is the ministry not follo…

How do Apple's products qualify as "cutting-edge technology"? Or, phrased differently, would Samsung also qualify? HTC? LG? What differentiates "cutting-edge" from "just another widget" in the consumer electronics sector?

I know people who work as "fixers" specializing in navigating such government restrictions and bureaucracy for local and foreign companies in India.

It is more likely that the real reason for Apple's rejection is the whim of some high level bureaucrat ("IAS officer"). It may not even be corruption, even righteous bureaucrats are often stupid. The amount of red-tape in India is astounding.

Re: Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods

#25

Post by davmre »

wodenokoto wrote: post #15
jordanb wrote: post #9

Earlier quoted context omitted.

I assume the law is for products that can not be produced at all in India. There is nothing Apple does in China that it can't do in India. All the really high tech components come from Korea, Taiwan, etc. Free trade aside this is a smart move for India: Apple has saturated the markets in the west and needs Asian consumers for future growth. It's been shut out of China despite being based there from a production stand…

Shut out of China? How so? It's been a few years since last I was in China, but I remember visiting several Apple flagship stores and seeing iPads and iPhones everywhere on the street.

Not shut out completely, but the government is pushing back: http://www.nytimes.com/2016/04/22/technology/apple-no-longer...

Re: Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods

#26

Post by vthallam »

choward wrote: post #6
justinlardinois wrote: post #3

> Apple was expected to receive an exemption from the rule, earning a recommendation from country's Department of Industrial Policy and Promotion, but the ministry of finance has decided Apple's products do not fall into the cutting-edge technology category. A source told Reuters Apple did not provide enough material to justify the exemption. So did Apple just submit a crappy application? Or is the ministry not follo…

I'm going with bribery. Some Indian officials just made a good chunk of change.

Not saying that bribery won't happen in this kind of cases, but it wouldn't definitely happen with a company as big as Apple. Especially not when Tim Cook met Modi regarding expansion in India.

Re: Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods

#27

Post by [deleted] »

justinlardinois wrote: post #3

> Apple was expected to receive an exemption from the rule, earning a recommendation from country's Department of Industrial Policy and Promotion, but the ministry of finance has decided Apple's products do not fall into the cutting-edge technology category. A source told Reuters Apple did not provide enough material to justify the exemption. So did Apple just submit a crappy application? Or is the ministry not follo…

[deleted]

Re: Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods

#28

Post by pcurve »

ikeboy wrote: post #23
pcurve wrote: post #22

Earlier quoted context omitted.

oh no definitely not. For company product aggregate. http://www.franchisetimes.com/May-2015/How-Indias-investment... 'All multi-brand retail operations with FDI must be locally sourced with at least 30 percent of the value of manufactured/processed products from Indian “small industries,” which have a total investment in plant and machinery not exceeding U.S. $1 million. ' Quite a tall order still.

But then how can you know how much will sell ahead of time? Suppose I have exactly two products, one fully sourced from India, one sourced elsewhere. The legality depends on whether the first sells more than a 7:3 ratio over the second, which can't be determined before actually selling.

You're right and I don't know the details. But I assume you'd have to provide plausible sales projection data to the authority, and then have periodic audits.

Re: Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods

#29

Post by velodrome »

arey_abhishek wrote: post #16
wrong_variable wrote: post #13

Before people get out their pitchforks. These laws in India are a direct result of 200 years of British 'free' trade. Imagine the amount of damage something like NAFTA has done to the american working class - multiply that with 200 years. While america was in its infancy - before it industrialized - it too used protectionism as a way to allow its local industries to grow, how is it bad if India is trying to do the sa…

I'll add that America is the most protectionist country according to Credit Suisse: http://www.businessinsider.in/The-country-that-imposes-the-m... (Couldn't find link to original report) Worked out well for America. Protectionist laws are a legitimate tool for social and economic progress.

This is the original Credit Suisse report:

The End of Globalization or a more Multipolar World?

https://doc.research-and-analytics.csfb.com/docView?document...

Re: Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods

#30

Post by jerryhuang100 »

this is the same as the 35% tariff suggested by donald trump for all nafta products, just in another form and many steps back from global trades. does that mean apple can finally open its own produce market by selling locally sourced apples, apple pies, apple cider? or it's even better that apple could just place some automatic packaging factories next to its warehouses in india and by volume i believe it's more than 75% of apple's main product.
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