Indian Ministries Divide on Apple's Retail Vision
May 30 2016 - 8:13AM
Dow Jones News
By Rajesh Roy and Newley Purnell
India's minister for commerce and industry said she supports
waiving rules that threaten to block Apple Inc.'s retail stores,
offering new hope for the tech company's bid in the country.
The finance ministry "has taken a different line," Nirmala
Sitharaman told reporters at a news conference Monday. "We will
talk to them."
At issue is a requirement that foreign-owned single-brand
retailers buy at least 30% of their manufacturing materials from
Indian vendors. Apple in January said it had sought government
permission to open its own retail stores, which would help it fight
the stiff competition from low-cost rivals in the country, set to
overtake the U.S. as the world's second-largest smartphone market
after China.
Last month, a government panel recommended waiving the
local-sourcing rule for Apple, but the Foreign Investment Promotion
Board--a panel of bureaucrats that gives the final go-ahead to
foreign-investment proposals--disagreed, as did Finance Minister
Arun Jaitley, two government officials told The Wall Street Journal
last week.
It is unclear who has the final say. When asked, Ms. Sitharaman
said, "It's the government. We are all part of it."
An Apple spokeswoman declined to comment.
Ms. Sitharaman said her ministry opposes a separate application
by Apple to sell refurbished phones in India, whether imported or
refurbished locally. That proposal is currently being considered by
the Environment Ministry in consultation with the prime minister's
Office.
The apparent disagreement within the government could reflect a
desire for more clarity from Apple about how much it intends to
invest in India, said Tarun Pathak, a Delhi-based analyst at
technology research firm Counterpoint.
Apple Chief Executive Tim Cook visited India this month on a
charm offensive, meeting with Prime Minister Narendra Modi to
discuss his company's manufacturing and retailing plans, watching a
cricket match and posing for photographs with Bollywood stars.
During the visit Apple announced plans to open two new offices
in India to foster the development of mobile apps and mapping
services in the country.
India, in pursuit of long-term growth, wants to leverage Apple's
interest to attract investment and create manufacturing facilities
and jobs.
"At the higher levels they are more concerned about what Apple
is doing in India," Mr. Pathak said.
Write to Rajesh Roy at rajesh.roy@wsj.com and Newley Purnell at
newley.purnell @wsj.com
(END) Dow Jones Newswires
May 30, 2016 07:58 ET (11:58 GMT)
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