In a high-level meeting chaired by Prime Minister Narendra Modi on Monday, the local sourcing norms of 30 percent on single brands in general were relaxed for up to three years and for those with “state-of-the-art” and “cutting-edge” technologies for five years.
This, analysts believe, will particularly favour Apple Inc.
“Of course, the move is going to help Apple,” said Vishal Tripathi, Research Director at global market consultancy firm Gartner. The Cupertino-based tech giant has been pushing for such a move which also had the strong backing of the commerce ministry.
“This will sure lead the tech giant to open its signature iWorld stores in India soon. The move, however, may affect its current partners’ business in India once Apple decides to go alone,” Tripathi told IANS.
An e-mail query to Apple India evoked no response till the release of this article.
With the bureaucracy in India catching on to loosely-worded phrases while giving their approvals to projects, some analysts felt some terms needed to be elaborated further. But the overall response was this will be done in a more detailed manner.
“The catch here remains what is the definition of the ‘cutting-edge’ technology or how the government will define what is ‘state-of-the-art’ technology,” said Faisal Kawoosa, Lead Analyst with CyberMedia Research (CMR), a market research firm.
“Then in a similar manner, how will Apple prove that it has got the right features for availing the benefits? The norms have been carved out in such a way now that Apple needs to prove that the company deserves it,” Kawoosa said.
The Confederation of Indian Industry did not name Apple specifically in its reaction.
“Relaxation of local sourcing norms under single brand retail trading for advanced technology products would encourage global brands to build up their participation in the country,” the chamber said.
Last month, Commerce and Industry Minister Nirmala Sitharaman said she was pursuing Apple Inc’s case with the Prime Minister’s Office regarding the norm of 30 percent compulsory local sourcing for single brand foreign retail entities.
India does not take up the cases of foreign multi-brand retailers.
“We took a line that we wouldn’t mind waiving off the local sourcing norm for Apple’s high-end products,” she had told reporters. Soon after, Finance Minister Arun Jaitley also relented and said he was all for scrapping the norm.
Apple chief executive Tim Cook is also reported to have made this pitch when he met Prime Minister Narendra Modi here in May.
Now that the path appears to have been cleared, there are some more loose ends to be tied up, analysts said.
“I don’t see people queuing up at Apple signature stores in India as they do worldwide,” Tripathi said. “It will benefit to buy from an Apple store if the cost and alternative buying options like EMI are the same as compared to partner stores.”