As India opened up almost all of its key sectors to 100% FDI, the tech crowd rejoiced over possible green signal to Apple, to open its single brand retail stores. While the new norms do give Apple the go ahead, it isn’t going to be just that simple.
According to PTI, Apple will need to submit a fresh application for the same. The government is also yet to take a decision on whether Apple’s technology falls under the category of “cutting edge”.
Under the latest FDI reforms, the government had relaxed local sourcing condition for single-brand retail stores. Previously, it was mandatory for companies to procure 30% of their manufacturing resources locally within India. Now however, companies who are working on ‘cutting-edge’ technology do not have to meet this condition for first three years. And after that, they will need to procure 30% material from local sources annually for the next five years.
Apple had been asking the government to waive off local sourcing norms on the grounds that it was working on cutting edge technology.
The government had approved Apple stores but without any relaxation in local sourcing condition. This was because it did not find any evidence of Apple’s technologies being cutting-edge and revolutionary. After the new changes, a government official said that Apple will need to file a fresh application to seek exemption from local sourcing conditions.
Cutting edge or not ?
Once again, the government is looking to re-assess whether Apple’s technology is cutting edge or not. Regarding the same, the official said,
After a proposal comes to the DIPP, it will have to be decided by the concerned administrative ministry on whether a technology is cutting edge. It will be a case to case decision.
The grounds on which nature of technology will be decided are still somewhat vague. Reportedly, the finance ministry wanted the Industry Ministry to lay down clear cut rules and precise definition about the same.
But Department of Industry Policy and Promotion (DIPP) had insisted on making this decision on a case-to-case basis. This was because it is very difficult to give a precise definition to the nature of a technology.
The ministry concerned will have to look at parameters like the relevance and the nature of the technology used in the product to take a view. It has to be a consistent view.
said the official.
In the case of Apple, Department of Information and DeITY will jointly give a verdict on whether Apple’s products fall in the category of cutting edge technology.