Why road for Apple is full of bummers in India?

As per a recent news, the Foreign Investment Promotion Board (FIPB) has rejected Apple's plea of exclusion of sourcing devices in the country.
Apple Inc

Highlighted with a ‘starry affair’ dinner hosted by actor Shahrukh Khan along with leading B’town flag-bearers, Apple’s CEO Tim Cook made a show stopping visit to India last week. Unlike Steve Jobs, who distinctively came to India, as a backpacking-beatnik in search of peace, Cook’s visit was far more strategic and official.  But, did his 4-days trip go as planned? Well, not really!

CEO of world’s iconic technology conglomerate, who perceives India as one of the key markets for his company, will have to put some more efforts in order to experience a smoother ride in the country. As per a recent news, the Foreign Investment Promotion Board (FIPB) has rejected Apple’s plea of exclusion of sourcing devices in the country. A 30 per cent sourcing commitment is specified under the foreign investment rules in single-brand retail but can be waived if products involve 'cutting-edge' technology.

Responding to the move by FIPB, the California-based company has said that it won’t set up company-owned stores in India if the government doesn't exempt it from sourcing materials locally. 

The company, as off now, has no plans to start manufacturing devices in the country or to buy parts from local vendors. However, the Commerce Ministry is in favour of waiving off the rule but the Finance Ministry is not.

Cook during his maiden visit to India said that having fully-owned stores in India is a key element of the vision for what he sees as one of the most important markets for the iPhone maker in terms of setting benchmarks for sales and service. 

This sheer focus and CEO’s high-profile visit to the country clearly indicates Apple’s intention to strengthen its retail operation in India which currently stands tall and one of the leading smartphone markets of the world. Another reason why the smartphone maker is stressing upon its entry in India is the slowdown of sales it is facing in markets like China and the US.

Apple wants a no-obligation clearance for setting up its stores, since it is not sure about manufacturing anything in the country immediately. The company is leaving no stones unturned to build its grip in the country. Recently it approached with a plan to sell refurbished iPhones in India which got rejected by the Finance Ministry. Reasoning the move made by the government Commerce Minister Nirmala Sitharaman said that the government is not be in favour of whatever Apple may call it - used but refashioned, remodelled, updated... used goods.

From the company’s standpoint the refurbished products would allow people access Apple ecosystem at an affordable price point. It’s as same as selling a used car but with the manufacturer’s certification.

Roads for Apple seem to have got tougher in the country. However, Cook’s India visit and 4 power-packed days of high-end networking with business barons, actors and ministers might give the company the breakthrough they need.

Indian was the only country that gave positive numbers when Apple reported its first ever revenue decline in 13 years. At this time, when the global iPhone sales dropped by 16 per cent for the first quarter of 2015, India showed a whopping 56 per cent rise is the same quarter.

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