India’s finance minister has reportedly shot down any remaining hope Apple may have had for opening retail stores in the country, as he is said to have ratified a ruling that Apple must follow local sourcing rules.
Arun Jaitley supported the Foreign Investment Promotion Board’s view that Apple can’t be exempt from the rules, sources told Bloomberg on Wednesday. Indian regulations normally state that a foreign business must source at least 30 percent of its components locally if it’s running a single-brand store.
Apple’s suppliers are mostly located in China, and the company has no manufacturing facilities located in India. There may be hope somewhere down the road, as Apple’s main manufacturing partner, Foxconn, is said to be planning a facility in the country, but no deal has been signed. When a deal is in place, construction of such a facility could take around 18 months or so to complete.
Lacking any stores of its own, Apple has been required to resort to various third-party and reseller deals to have any sort of retail presence in the growing India market. The strategy has resulted in only a 2% share of the Indian smartphone market for the iPhone-maker.
While Jaitley’s decision could be overturned by Indian Prime Minister Narendra Modi, that is not likely, as Modi’s platform is based on a “Make in India” initiative intended to encourage local manufacturing. Apple CEO Tim Cook did meet with Modi last week, during his visit to India. Retail stores and manufacturing facilities in the country were included in the numerous topics the duo discussed.