DIPP waives 30% local sourcing norm for Apple
The Dollar Business Bureau
Apple has finally received a nod by DIPP on Wednesday to start its retail outlets in the country. The panel, led by Ramesh Abhishek Secretary, DIPP (Department of Industrial Policy and Promotion) has waived the 30 percent local content sourcing norm for Apple.
According to sources the panel has agreed to remove the condition as it looked forward to the “cutting edge technology” that Apple would bring into the country. The committee has approved Apple’s proposal but is awaiting a go-ahead from the Finance Minister Arun Jaitley.
Other than Apple, Chinese firms such as Gionee, LeEco and Xiaomi, have also approached the Indian government to set up single brand retail outlets in the country and have asked to waive the mentioned local sourcing condition. The panel is yet to consider their applications.
Earlier the government had already allowed 100 percent foreign direct investment (FDI) in single brand retail sector. Last year, it removed the mandatory 30% local sourcing condition for foreign companies to attract more FDI in the single brand retail sector albeit on certain terms. The government expects Apple to set up its manufacturing units in India.
Though Apple has its own outlets in several other countries, it has tied up with some retail chains to sell its products in India, which include Imagine and iStore (Reliance Digital). Apple is also planning to launch new “store-in-store” in Tata’s Croma showrooms.
The approval by the government brings relief to Apple as iPhone sales have declined in the 2nd quarter of FY 2016, resulting in a dip of quarterly profit by 22.5 percent, for the first time since the launch of its product.