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Government believes Apple’s technology not ‘cutting-edge’, denies local sourcing waiver: Report

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It seems that Apple CEO Tim Cook’s visit to India didn’t bear much fruit. A report from Economic Times suggests that government has offered no relaxation in local content sourcing norms to the Cupertino tech giant.

In a bid to open a chain of retail stores in India, Apple had filed a proposal asking the government to waive 30 per cent local content sourcing charges. Apple’s proposal to setup official retail stores under the single brand policy has been approved but without any relaxation in local sourcing. The Government officials on the Foreign Investment Promotion Board have offered a just explanation for rejecting the company’s waiver proposal.

Apple’s proposal is acceptable to us but we cannot make an exception for it and forego the sourcing requirement if it wants to set up its own stores here.

said a government official on the panel.

The panel had previously recommended the Cupertino-based company for a 30 per cent waiver on the grounds of ‘cutting-edge’ and ‘advanced-technology’. But after thorough inspection, the government says that they have found no evidence of Apple’s technologies being cutting-edge and revolutionary. Thus, they cannot grant them the required waiver. The proposal to open retail stores has been approved though.

The report also mentions that Chinese smartphone makers like Xiaomi and LeEco have also applied for exemption under the local sourcing laws. The board members believe that if they had dispensed the waiver to Apple under unjust conditions and not restricted to the cutting-edge technology guidelines that have been set in place, then it would have been biased towards one smartphone manufacturer trying to enter a developing global market like India.

As accepted by CEO Tim Cook himself, since Apple currently has no manufacturing plant in India, it directly ties into the high pricing of iPhones in India. Even though Apple might have failed to get a grant from the government on one front, but the talks to setup a plant in partnership with Foxconn to manufacture refurbished iPhones has been discussed in Cook’s meeting with the PM

Plus we hope that Apple will be introducing new devices(iPhones, Macbooks) and softwares(Siri SDK) to bolster their position in declining markets like India and China at WWDC’16. Cupertino has also invested over $1 million in China’s cab aggregator Didi Chuxing to rival Uber.


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