Apple Inc. will need to create jobs for Indians if the company wants to sell its products in India through its own stores, according to Indian Finance Minister Arun Jaitley, who was talking to CNBC. The iPhone maker sees India as an important market, and is seeking approval to open its own retail stores in the country. The company is facing a setback as it doesn’t comply with a regulation to procure 30% of the components locally.
On Monday, Indian Commerce and Industry Minister Nirmala Sitharama announced the government has rejected Apple’s proposal to sell refurbished iPhones in the country. It seems that Apple CEO Tim Cook’s recent trip to India did not pay off as expected.
Apple Doesn’t Meet 30% Local Sourcing Norm
The Indian Finance Ministry rejected a recommendation from the commerce ministry to waive the 30% local sourcing norm for Apple to sell iPhones in its own stores. It seems difficult for the company to meet the 30% sourcing requirement because it makes most of its products in China.
Talking to CNBC, Mr. Jaitley said: “Speaking for myself, I feel it was based on good rationale, and the rationale behind the policy was, when somebody eyes such a large market, obviously job creation also is something the government of India is concerned with.”
Apple has its retail stores in the US, the UK, Germany, France, China and Japan.
India offers waivers to companies that provides cutting-edge technology. Jaitley said that the government would take a call on whether the company meets this criteria. Chinese companies Xiaomi and LeEco had also applied for a similar waiver, Live Mint reported.
Apple Cannot Sell Refurbished Devices
And there’s more bad news for Apple Inc. in India. The Indian government has rejected the company’s plan for selling refurbished iPhones. “We are not in favor of any company selling used phones in the [country], however certified they may be,” India’s Commerce and Industry Minister Nirmala Sitharaman said a press conference in New Delhi on Monday.
Apple offers its products at a premium to Indian consumers. More than 80% of the phones sold in the country cost less than $150 while the cheapest new iPhone – the 4-inch iPhone SE – costs Rs. 39,000 or equivalent to $577.
Apple was looking to offer iPhones in India at an affordable price.
CEO Tim Cook said in an interview with NDTV 24X7: “First of all, we would never ‘dump’ anything; this in virtually all countries in the world we have a process by which a phone that’s been used by the first owner or is taken back and made to be new, if you will, and a warranty is placed on that, just like a warranty for a new phone. And it’s sold for a more affordable price and that happens in several countries. What we want to do is do the act of bringing it back to this pristine level, we want to do that in India for the Indian market. We may have to bring in some phones from other markets in order to fuel the supply chain if you will. But the act of bringing them to pristine conditions, we want to do that in this country,” Live Mint reported.
Shares of Apple Inc. have lost 15.17% during the past six months.