Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods | Hacker News Reader

Apple Not Able to Open Stores in India Without Selling 30% Locally Sourced Goods

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94 pointscharlieegan3111 comments

Before people get out their pitchforks.

These laws in India are a direct result of 200 years of British 'free' trade. Imagine the amount of damage something like NAFTA has done to the american working class - multiply that with 200 years.

While america was in its infancy - before it industrialized - it too used protectionism as a way to allow its local industries to grow, how is it bad if India is trying to do the same thing ?

The indian unemployment/underemployment problem will laugh at the face of the European/American moaning about jobs. Just to give you an interesting statistic - 85% of student loans in India is under water ( compared to 50% in america ).

There was this interesting story of engineers in India accepting jobs as pions ( gaurds/watchmen ) for a miserable 200 dollars salary a month. Could you imagine yourself in that position ? So I do not fault the govt for these laws or else there will be serious civilian unrest.

Indian markets, products and the economy in general is really bad and unsophisticated. There is no way they can compete with american, European and Chinese companies.

Of'course some bureaucrats within the Indian Govt uses this as a way to extract wealth from foreign companies who want to set up shop in India. But that is a corruption problem rather than an argument against the law. Even simple law in India is hard to enforce due to corruption, the reward greatly outweighs the risk.

Hopefully things will improve in India.

I'll add that America is the most protectionist country according to Credit Suisse: http://www.businessinsider.in/The-country-that-imposes-the-m... (Couldn't find link to original report)

Worked out well for America. Protectionist laws are a legitimate tool for social and economic progress.

This is the original Credit Suisse report:

The End of Globalization or a more Multipolar World?

https://doc.research-and-analytics.csfb.com/docView?document...

What is the evidence that Americans wouldn't be better off if there were less protectionism?

Protectionism shrinks markets, drives up prices, and reduces consumer choice. The decreased competition from protectionism also decreases technological development.

Your links cites a report that itself gets its numbers from the "Global Trade Alert," which is an org that aggregates a variety of trade-related actions published by the governments of each country. Only a fraction of these are actually related to governments being protectionist. A huge number of these "actions" appear to be petitions by companies inside a country for trade investigations against other companies or nations. Another big chunk appear to be listings of every law enacted that gives even a few million to some factory in a given nation. Not unsurprisingly, the aggregator just lists a bunch of state laws in the US.

The fact that America, with its very transparent political/legislative/corporate-grievances system would be recorded more often by this aggregator, is not surprising. In other words, this aggregator is going to be biased to record more trade-related events coming from more transparent nations that have more corporations located inside of them, and whose corporations will tend to try to resolve their trade disputes in the courts.

But I guess you couldn't be bothered to investigate the numbers when you could just cite BusinessInsider.

Agreed. Friends use an up vote for this parent.

why is this downvoted ? I didn't read this as an endorsement to upvote but rather as witty response to @argonaut , unless i'm missing something else entirely here and the downvotes are warranted.

See:

https://news.ycombinator.com/newsguidelines.html

"Please resist commenting about being downvoted. It never does any good, and it makes boring reading."

Rallying the crowd for up-votes (even for another user's post) falls pretty much in the same ballpark.

like I said, I didn't read it as a rally for upvote, but rather a witty response to the previous comment. Unless he/she actually was rallying for upvotes and I read it wrong.

Thanks man. I have plenty of other stuff I used rally-ing up on ;-) next time all say 'well played' instead of up vote

Argonaut, are you suggesting that the chart shows transparency of nations?? That's inferring a lot from one chart :) I don't think America is the most transparent country in the world.

Credit Suisse did the research and reported the chart+numbers.

From Global Trade Alert's website: 'Global Trade Alert provides real-time information on <i>state measures</i> taken during the current global downturn that are likely to affect foreign commerce.' It is not a list of petitions by companies.

Here's the original report from CS: https://doc.research-and-analytics.csfb.com/docView?document... appears on page 20)

And Trump is all about protectionism. If America wasn't the most protectionist country before, it certainly will be very soon.

America is in fact one of the most transparent nations on earth. [1] That includes the judiciary, presidency, congress, and law structure. The US Government and state governments publish vast amounts of information about their operations, studies, results, bills, spending, research, etc that is publicly available. The US routinely scores among the top few nations when it comes to making such data public.

It's also widely regarded as one of the least corrupt nations. [2] Transparency and low-corruption are two things that very frequently go hand-in-hand.

[1] http://www.usnews.com/news/best-countries/transparency-full-...

"Denmark [the US came in #11] is the most transparent country, according to more than 8,000 informed elites from four different regions who filled out surveys for the 2016 Best Countries rankings. The rankings, formed in partnership with brand strategy firm BAV Consulting and the Wharton School of the University of Pennsylvania, aim to gauge global perceptions of the world's biggest economies in terms of specific attributes associated with countries."

On corruption the US is listed at #16 by transparency international, ahead of France and Japan, but behind Australia and the UK:

[2] http://www.transparency.org/cpi2015#results-table

Credit Suisse just copied the numbers from Global Trade Alert. Did you even look at the reports on the Global Trade Alert website? Or did you just read the "About" page?

Mentioning Trump is just FUD and indirection. You can mention him if he's elected and if he manages to enact protectionist policies.

Yes I did look through GTA's site and about us page. I looked at GTA and it's a highly respected research org. And CS is a very competent investment bank. So I do believe their research.

You are attacking a straw man. Find me another data source that refutes GTA and Credit Suisse.

Peace.

This is a terrible argument from authority. You didn't actually look at the GTA data, did you? I did, and most of it falls into the categories I outlined in my original comments.

That chart at the top the _number_ of protectionist actions...

As in, Country A takes 2 actions that affects $1 in trade. Country B decides in 1 action that no imports are allowed. And so it concludes Country A is clearly more restrictive.

Does that conclusion seem correct to you? Don't you think you need more information than just that?

> Protectionist laws are a legitimate tool for social and economic progress.

Just not technological progress.

The auto manufacturers in the U.S. are a prime example of how protectionism stagnated industry development.

> While america was in its infancy - before it industrialized - it too used protectionism as a way to allow its local industries to grow, how is it bad if India is trying to do the same thing ?

I was under the impression that anti-protectionism was one of the least controversial positions among economics. Obviously it can help the specific local industries that are being protected from competition, but it seems almost obvious to me that it's going to be a net negative for the people of India. (I am not an economist.)

> I was under the impression that anti-protectionism was one of the least controversial positions among economics.

It is, but I think this says more about the sorry state of economics than it does about whether protectionism is ever a good idea.

Why do you say that? Again, I'm not an economist, but opposing protectionism makes sense to me intuitively.

Most important piece of the following post? http://www.zompist.com/jacobs.html

I'm not an economist, but I've gotten the impression from reading lots of articles like this, that it is net negative overall, as in, world wide. But I have never, ever seen a source claim that it is net negative on a national or local level outside of very, very narrowly defined parameters. I have, however, read academic papers that state the opposite.

Let's use NAFTA as an example as the canonical example. A corporation that makes tires moves to Mexico. As a result, tires for everyone in America are now half price, people who had no jobs in Mexico before now have jobs, which helps build out Mexican infrastructure, 20k people across the US no no longer have jobs; but the US economy is healthy, so those people will hopefully be okay and the US economy will likely not even notice such a slight change in labor demand.

Net result: 320 million people have cheaper tires in the US, Mexicans get better jobs, infrastructure and technology, 20k us lose jobs, the corporation saves money, and hopefully reinvests in something to stay competitive.

Using the above scenario, it is easy to see why any legislation against this behavior is seen as damaging and a net loss.

Lets further assume, that the US passes legislation that trailer hitch manufacturers have to pay an import tarriff from Mexico. Using the above scenario, an economist would say not only are you damaging what should be a net positive economic change, and artifically manipulating prices, but chances are Mexico will pass a law adding a tarrif to rubber imports, which will hurt your tire corporation in retaliation. And now the whole thing starts falling apart, with economic losses.

The counter arguments start with the following:

1) The above scenario assumes that those 20k people can find new jobs. If they can't, the math now becomes something along the lines of: 20000 people * 30000 $/year income >?< 320000000 people * 1000 $ saved for a set of tires * 1/6 (once every 6 or so years) + 20000 people * democracy destabalizing factor * wealth inequality factor

2) Before NAFTA, let's say there were 6 tire making companies in the US, one in detroit, one in newark, etc. Then one of them moves to Mexico City, and helps build up the local technical knowledge and infrastructure needs to support that industry. When the next 5 companies choose to move to Mexico, they will have the choice between also moving to Mexico city, or spending the money to do that same work elsewhere. So you may very well end up with 6 companies operating out of mexico city. While these firms will now be competing against each other, what you've also done, now is replace all of the economies that used to support those industries across the US, with one centralized economy around Mexico City. That's going to be a massive decrease in competition, job growth, etc, overall. Read this for more information: http://www.zompist.com/jacobs.html

> But I have never, ever seen a source claim that it is net negative on a national or local level outside of very, very narrowly defined parameters.

Adam Smith already (and lots of other economists since) have argued for unilateral free trade.

That's in keeping with my post

Hmm, I was a bit confused by your multiple negations at the top. Also not quite sure what your point is.

> That's going to be a massive decrease in competition, job growth, etc, overall [when producers move to a cluster].

Can you expand on that? I don't see how---especially if we agree that the clustering is more economically efficient. (If we don't agree on that, we need to talk about it first.)

Did you read the jacobs link in my post? Economically efficient, sure. Which is fine if the economy is healthy enough that the displaced can continue to find and invent new jobs

I read the Jacobs link. (Actually, had already read it before. It's interesting, thanks.)

It's straight-forward to get a healthy enough economy to provide full employment. (Not `easy', because things are seldom easy in politics.) We even know how to afford a social safety net at the same time.

To not keep you in suspense: - tell the central bank to keep nominal GDP level on a stable growth path - untax labour and capital, put all tax burden on land (whose supply is perfectly inelastic) - use the tax to finance public infrastructure and a social safety net

If you are feeling like it add:

- remove most red tape from the labour market (the part that prevents hiring and firing; keep OSHA and the like)

http://www.economist.com/blogs/freeexchange/2011/10/monetary...

http://www.economist.com/news/leaders/21647614-poor-land-use...

(Not that the Economist is the best source for everything, but they write short pieces to the point.)

What's really going on in India ?

You paint a pretty bleak picture. Then I read firsthand reports by someone like yummyfajitas who lives and works there - https://news.ycombinator.com/reply?id=11766615&goto=item%3Fi... According to that, it is the US that's in the dumps. India has jobs for everyone at every level, whereas in the US people are living in filthy homes because maid service too expensive because $15 minimum wage.

I'm not sure what to believe anymore.

India has jobs for everyone at every level if you consider "temple beggar" to be a job and wizened old women in their sixties to be appropriate people to be doing road maintenance. $200 dollars per month sounds like an unusually generous salary for unskilled labour there too - engineering degree or no engineering degree. Of course, it also has plenty of opportunities for a growing middle class that didn't exist for their parents.

The reality is it's a developing country facing significant challenges, and no amount of trade liberalisation (or increased protectionism towards domestic manufacturing) is going to change that overnight. It's pretty hard to pin most of those challenges on the British destroying cottage weaving industries by dumping machine-made Manchester cotton on them in the early nineteenth century, or to argue that banning Apple Stores is a rational response likely to solve that problem.

Yeah, I'm not so sure.

On the one hand, there's stuff like this - https://twitter.com/pankaj/status/729417379730448384

Here you have SF entrepreneurs with vastly more capital & information than the average person in the US buying one way tickets to India.

Just last week, I had coffee with a YC founder who mentioned casually that "YC16 has dozens of startups out of Bangalore". He had conducted mock interviews for the accepted candidates & he was very excited for them & the Indian ecosystem. One or two companies is an outlier, but dozens ? That's a gamechanger.

At the same time you talk of "temple beggar jobs and 60 year old women doing road maintenance".

Am honestly unable to reconcile these opposing narratives.

There are basically two Indias: India has an educated middle class of significant size and a much larger (and much poorer) lower class. They exist side by side, so you get some contradictions if you try to treat India as one homogeneous population.

Why is it hard to believe that a country where a certain class of people has gone up in wealth and opportunity, other people are still stuck? What notahacker says its correct. There's more to India than just living in the urban centers of Delhi, Bangalore, Mumbai, etc.

Sure if you have an American middle class salary/savings and go to India you'll live a very luxurious life (by Indian standards). You'll have AC in your house, servants to come and clean and cook for you. You can hire a driver for road trips. However your surrounding environment will be worse off than compared to the US (pollution, smog, corruption, inadequate infrastructure)

The servants however are still living in poverty or close to poverty. Go outside a major city to the countryside and its still very underdeveloped.

>At the same time you talk of "temple beggar jobs and 60 year old women doing road maintenance". > Am honestly unable to reconcile these opposing narratives.

India is a massive complex country, just like the US. It has plenty of physical and cultural space to accommodate both those narratives. You might consider visiting there to see both play out at the same time for yourself - it's fascinating.

But you don't need to look as far as SF to India to find such opposing narratives. SF entrepreneurs with vast amounts of capital are in close proximity to many people right in the Bay Area working for low wages in marginal and informal jobs (day laborers, child-care workers, domestic maids), and even people in jobs that involve human oppression (human trafficking, etc).

EDIT: comment added.

> Imagine the amount of damage something like NAFTA has done to the american working class - multiply that with 200 years.

Citation needed. This is still a controversial issue in policy, and anyone certain of any one side has no idea what they're talking about. There is evidence it net hurt jobs. There is evidence it net gained jobs for the US.

What about robots replacing jobs? http://www.bbc.co.uk/news/technology-36376966

Irrelevant to my point?

They might be saying that evidence of job loss to Mexico is further complicated by the fact that the jobs may have been lost to automation anyway. I.e. that's one more reason nobody can definitively say NAFTA was good/bad for American working class employment.

Bingo!

Not all jobs are created equal. NAFTA was great for destroying Unions and lowering costs, not sure if it created good jobs.

Of course it was just another attack on the middle class. http://www.theatlantic.com/business/archive/2012/06/are-unio...

PS: I don't 100% agree with this, but it's a viewpoint I rarely see on HN and fits the discussion.

I agree with the sentiment, but expecting the company to bend over backwards is pretty naive. It's more likely that'll make products more expensive or just harder to find, not help the country advance.

Sorry for nitpicking, but:

s/pions/peons

s/gaurds/guards

thanks !

> interesting statistic - 85% of student loans in India is under water ( compared to 50% in america )

What does "loan under water" mean in this context? In a collateralized loan context (car or house), "under water" means that the borrower owes more than the market value of the collateral.

I suspect that the GP simply meant that 85% of Indian loans are past due.

Rhetorically, you could consider them as being underwater if the asset purchased (human capital) isn't providing sufficient value (income) to service the loan.

think he means student loans with collateral not doing well due to variety of reasons defined here [1] and I think you are thinking about underwater mortgages as defined here [2] 1. http://goo.gl/21TmQm 2. http://goo.gl/UVNIFr

Essentially for some reason or other the loans are not being repaid - and mostly likely wont be repaid due to high unemployment among the people who took the loan.

India's extremely complicated bureaucratic nightmare of inter-state borders and customs/tariffs is the fault of the British?

http://www.theguardian.com/world/2015/jan/31/india-economic-...

Imagine if you had cargo truck borders and customs paperwork between every one of the US 50 states and what a nightmare it would be for trucking/logistics/distribution/warehousing/cold chain/etc.

Indian states have a significant degree of regulatory autonomy, far beyond what a US state or a Canadian province has, to the extend that some states are looking at banning alcohol entirely and others have unique tax code and criminal code laws not found in the rest of India.

The post has nothing to do with inter-state commerce. Its to do with Federal Laws set by the Indian Govt, which overall seems to be deeply protectionist. If you ask any historian the reasoning for this attitude in India and why its tolerated - is mainly because of the holdover from the time India was colonized by European Powers.

Essentially what I am saying is that its not easy to sell 'Free Trade' in India.

I wasn't blaming anyone for anything - just staying the facts. I personally think it would help India to loosen up some of its protectionist laws and be a little bit more like China - but that is just my own opinion.

My personal car was stopped by octroi officers near a state border in India. They searched my car, and then said that I should have paid octroi tax on the personal computer I was carrying in the car.

I told them that all taxes were paid including VAT and Octroi for the computer when I bought it 5 years ago.

The said it doesn't matter, I must stop at the Octroi office and pay taxes again every time I am crossing a state border for everything I am carrying in my vehicle.

He said my only option is to pay them bribe, or they will impound my vehicle indefinitely.

Out of curiosity are you ethnically from somewhere in India / South Asia, or a foreigner?

I am Indian.

Yes, this is fairly common in all of South Asia.

The way to get around this is to look poor and be brown/black. Whenever I go back:

1) I buy a local school bag back ( put my expensive laptop and phone in it )

2) wear wife beater that is slight dirty.

3) do not shave.

4) speak only in Hindi.

5) wear only chapal ( bathroom style )

7) let your hair grow and do not comb.

Once you look poor enuf - no one will disturb you.

Since my job is programming - I really do not need to look presentable since people know who I am. But I do feel sorry for anyone who needs to wear a suit.

Unfortunately the only way you be be rich in public is if you have a bunch of body guards.

These tips usually don't help in India. If you look poor and nobody, the police could even beat you up for no reason.

If you look and act rich & influential, then police and Government officials play nice with you.

so, you're screwed either way? or you should try to look middle class and neither rich nor poor?

> India's extremely complicated bureaucratic nightmare of inter-state borders and customs/tariffs is the fault of the British?

The West's legacy of (literally) militant mercantilism is the root cause of quite a lot of issues we are currently facing in the world.

The weapons have changed. The mindset remins the same.

> Indian markets, products and the economy in general is really bad and unsophisticated. There is no way they can compete with american, European and Chinese companies.

Lots of previously poor countries have industrialized via exports.

One can argue they used protectionism at home---misguided as it is. But nevertheless their companies managed to sell to fickle foreigners in the foreigners' home markets---all sophistication issues aside.

Default of student loans in India is around 8% which is about 1 Billion USD. Source http://www.dnaindia.com/money/report-banks-learn-a-hard-less...

Default of student loans in USA is around $1 trillion.

Isn't this what is called comparing Apples and Oranges.

> Apple was expected to receive an exemption from the rule, earning a recommendation from country's Department of Industrial Policy and Promotion, but the ministry of finance has decided Apple's products do not fall into the cutting-edge technology category. A source told Reuters Apple did not provide enough material to justify the exemption.

So did Apple just submit a crappy application? Or is the ministry not following the spirit of the law?

I won't pretend for a moment that I know anything about Indian law though, so I have no idea who's to blame here.

India is heavily invested in protectionism, that's the primary issue, the exemption is in place because it was clear no one was going to make smart phones there.

Well, given Micromax exists and has manufacturing (and HQ) in India, now Indian government can say that smartphones are not cutting-edge high-tech per se.

Just like Apple in China, I'm betting all Micromax does in India is assemble phones from high-tech subparts that were made in Korea, Taiwan, and the United States.

Not sure whether this is relevant because I'm not sure exactly what counts towards the "30%" figure.

OnePlus manufactures in India.

http://wap.business-standard.com/article/companies/oneplus-p...

I'm going with bribery. Some Indian officials just made a good chunk of change.

Or, more likely, didn't make the chunk of change they wanted ...

Not saying that bribery won't happen in this kind of cases, but it wouldn't definitely happen with a company as big as Apple. Especially not when Tim Cook met Modi regarding expansion in India.

How do Apple's products qualify as "cutting-edge technology"? Or, phrased differently, would Samsung also qualify? HTC? LG?

What differentiates "cutting-edge" from "just another widget" in the consumer electronics sector?

I assume the law is for products that can not be produced at all in India. There is nothing Apple does in China that it can't do in India. All the really high tech components come from Korea, Taiwan, etc.

Free trade aside this is a smart move for India: Apple has saturated the markets in the west and needs Asian consumers for future growth. It's been shut out of China despite being based there from a production standpoint. If India can force Apple to shift production to India in exchange for access to its consumers that would be a great coup.

Shut out of China? How so?

It's been a few years since last I was in China, but I remember visiting several Apple flagship stores and seeing iPads and iPhones everywhere on the street.

Not shut out completely, but the government is pushing back: http://www.nytimes.com/2016/04/22/technology/apple-no-longer...

Discussed at https://news.ycombinator.com/item?id=11549697

I read "cutting edge technology" as "computers, phones, and other sophisticated electronics." It would be helpful if the article mentioned if the Indian government provides a concrete definition.

the cutting edge of technology is always moving, moreor less tautologically, they could give better guidelines (i haven't read them they might actually be very good guidelines already) but there isn't going to be a concrete definition.

I know people who work as "fixers" specializing in navigating such government restrictions and bureaucracy for local and foreign companies in India.

It is more likely that the real reason for Apple's rejection is the whim of some high level bureaucrat ("IAS officer"). It may not even be corruption, even righteous bureaucrats are often stupid. The amount of red-tape in India is astounding.

On the contrary, my guess would be that this decision was taken at the highest political levels, and I applaud this decision. I read that the govt. set up a small committee of bureaucrats which recommended a waiver and I was hoping for this outcome. This would hopefully incentivise Apple to move at-least some of their assembly to Foxconn India. We need all the jobs and economic activity we can get.

I don't know, forced Import Substitution Industrialization (https://en.wikipedia.org/wiki/Import_substitution_industrial...) hasn't worked very well around the world so far.

Worthy quote from that article:

"While import substitution policies might create jobs in the short run, as domestic producers replace foreign producers, economics theory shows that in the long run output and growth will be lower than it would otherwise have been. This is because import substitution denies the country the benefits to be gained from specialisation and foreign imports. The law of comparative advantage shows how countries will gain from trade. Moreover, protectionism leads to dynamic inefficiency: Domestic producers have no incentive from foreign competitors to reduce costs or improve products. Import substitution can impede growth through poor allocation of resources, and its effect on exchange rates harms exports."

I'm not sure how that would apply to veblen goods when the status they confer is tied up in actually not being produced locally.

Interesting point. I wonder how much of an economic impact these goods have? (Ie if they exist, do they matter?)

> How do Apple's products qualify as "cutting-edge technology"?

If Apple does not qualify as "cutting-edge technology" then what does?

If a store is selling to consumers, it's inherently going to be not at the very edge of development.

If Apple can't be approved for this exemption, this exemption makes no sense.

The rule is for cutting edge technology that is not available locally, which is a key stipulation.

We're talking about device manufacturing, which isn't exactly scarce in APAC. Apple already manufacturers chargers and other items in India.

IKEA applied and lost. LeEco and Xiaomi have also applied, and my guess is they won't get it as well on the same grounds.

If Apple does not qualify as "cutting-edge technology" then what does?

When I think cutting-edge, I usually think highly specialized medical or military tech - things that a only a small set of people can design/build.

But, it is a pretty flimsy phrase and could be open to abuse. Which is why I asked if other consumer electronics companies have succeeded/failed to obtain a waiver.

> When I think cutting-edge, I usually think highly specialized medical or military tech - things that a only a small set of people can design/build.

Sure, that is the absolute cutting edge.

But you don't need retail stores to sell specialized medical or military technology.

cutting-edge == the right people get paid

Hence the visit from the ceo of apple to the pm.

The title seems like the setup for a joke. Are we sure 30% of code from apps in the app store wasn't produced by outsourced programmers in India?

You don't buy App Store apps from the Apple store, you buy hardware, so that's not relevant.

Though if Indian programmers had contributed to the software that comes preinstalled on the products sold there, I wonder what would happen. Does "locally sourced" only apply to physical manufacturing?

> You don't buy App Store apps from the Apple store, you buy hardware, so that's not relevant.

Totally right. I wasn't thinking about this correctly.

> Though if Indian programmers had contributed to the software that comes preinstalled on the products sold there, I wonder what would happen. Does "locally sourced" only apply to physical manufacturing?

A very good question. How much should the software count towards what something is compared to the hardware, and how much would Apple value iOS compared to the hardware design of a new iPhone. I imagine traditionally it would be quite a bit more, but Apple also invested in a foundry and produces their own chips, so that definitely increases the hardware side valuation.

For anyone not reading the article, note this is about Apple stores and not Apple products. As the article says, Apple products are currently and will continue to be sold through third party distributors (eg, the Indian equivalent of Best Buy).

It is a little bit weirder a sort of protectionism than most of us think about, and a little bit harder for me to care about personally.

They could sell local apples, maybe?

What's 30%?

30% of sales by unit, sales by price, items for sale, floor space? Or something else?

At least 30 per cent of the value of procurement of manufactured/processed products shall be sourced from Indian small industries.

So for high margin product like iphone, they're going to base it on cost of good or (materials). There's probably some fudging room.

For each product? You can't sell any product unless 30% of it was made in India?

oh no definitely not. For company product aggregate.

http://www.franchisetimes.com/May-2015/How-Indias-investment...

'All multi-brand retail operations with FDI must be locally sourced with at least 30 percent of the value of manufactured/processed products from Indian “small industries,” which have a total investment in plant and machinery not exceeding U.S. $1 million. '

Quite a tall order still.

But then how can you know how much will sell ahead of time?

Suppose I have exactly two products, one fully sourced from India, one sourced elsewhere. The legality depends on whether the first sells more than a 7:3 ratio over the second, which can't be determined before actually selling.

You're right and I don't know the details. But I assume you'd have to provide plausible sales projection data to the authority, and then have periodic audits.

These FDI restrictions were placed for multi-brand retail stores like Walmart.

I guess Apple stores are considered multi-brand because they sell some products from other brands as well.

These restrictions are only for foreign companies. An Indian company can sell 100% imported products without any restrictions, but they are required to pay import duty.

Seeing a lot of neo-liberal economics dogma here in the comments, and so would like to recommend this excellent book: https://www.amazon.co.uk/How-Asia-Works-Success-Failure/dp/1....

It has an excellent account of how manufacturing (supported by heavy protectionism from the state) was a crucial component of the Asian miracle in nearly all countries. IMO India really needs to go through a round of manufacturing expansion, preferably in the high-tech sectors.

You mean paleo-liberal economics dogma? Just about all mainstream economists ever agree on free trade.

(Though in this case, they are just banning Apple Stores, apparently, not Apple products. So it doesn't really matter too much.)

I'm not surprised... http://www.dailymail.co.uk/news/article-2325502/Map-shows-wo...

This does not make sense based on my own experience of launching phones in India with Intex, Spice and a few other Indian manufacturers. 'Indian' smartphones are all made in Shenzhen. There is no smartphone manufacturing in India. So how can Intex and Spice sell their phones in India if their phones are made in China like the iPhone is?

Vendors like Spice and Intex are Indian companies. Companies can sell imported products in India, they just have to pay import duty on it.

India have FDI restrictions in retail sector to prevent big box retailers like Walmart from destroying local retailers.

Most of the popular brands including Apple already sell in India, but they have to partner with a Indian retailer to do so.

Irrespective of Apple being able open stores, one has to remember India is really tiny market for Apple widgets. There is no comparison to China in term of market size. Apple shipped around 1.7 million phone in India in 2015. This may look lot but going ahead I think they are going sell quite less than that as there is no 2 year upgrade cycle.

They will sell less upgrades, but there's oodles of Indians still without the status symbol that a nice iPhone is. (They just aren't rich enough yet to afford one.)

Even a tiny sliver of 1.3 billion people may be worth pursuing once other markets are saturated. There may be no comparison in terms of sales volume sales, but some might call that a growth opportunity, not a tiny market. Also note that these are new rules being tested, so what goes for Apple might also go for Amazon et al.

Apple sales are weak in India because iPhone is overpriced in India, prices of Apple products in India are a lot higher than US. In 2015, over 100 million smartphones were sold in India.

Apple sells iPhone 6s 16 GB for $920 in India[1], while you can buy comparable Android smartphones from manufacturers like Xiaomi and OnePlus for $300 to $400

Sweet-spot price for Indian middle class is $300 to $400 and they typically upgrade in 1 to 2 years.

[1] http://www.apple.com/in/iphone/compare/

I'd wager India are holding out for a 1 billion dollar bribe like the Chinese got! http://www.reuters.com/article/us-apple-china-idUSKCN0Y404W

For computer goods, what does 30% sourced refer to -- just the physical hardware? What about the software that goes into it? And what weight is given to software -- the development time / cost, or are there other metrics?

Great! good on you India

this is the same as the 35% tariff suggested by donald trump for all nafta products, just in another form and many steps back from global trades. does that mean apple can finally open its own produce market by selling locally sourced apples, apple pies, apple cider? or it's even better that apple could just place some automatic packaging factories next to its warehouses in india and by volume i believe it's more than 75% of apple's main product.

I'm totally in support of this policy. Controlling companies and making sure they understand clearly that they exist only at the pleasure and the whim of the government is the only way to bring our world back from the corporatist brink.

> Controlling companies and making sure they understand clearly that they exist only at the pleasure and the whim of the government

Worked out well for the Soviet Bloc

So much fervor for the rights of a government created legal fiction?

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