Apple Has To "Give" Something To India To "Take" Revenue From It
The tech giant journey for opening stores in India isn't easy and time will tell whether its worth it.
Apple Inc. is quite eager to get the permission for store opening in India –Asia’s third-largest economy. The tech giant is hopeful that its presence in the country will accelerate the sales. Amidst all this, Indian Finance Ministry Arun Jaitley has introduced a win-win situation in an exclusive interview to CNBC. According to him, all the foreign companies which are seeking to sell their products overseas by establishing sale outlets there should also provide job opportunities in the region.
After the tech giant suffered sales decline in China; it is now planning to integrate in another Asian market to boost its sales. However Apple’s application is still pending for an approval. According to the policy followed in the region, the single brand retailer ought to source local suppliers for at least 30% of their raw material needs. The rule was coined down by previous United Progressive Alliance coalition and according to Mr. Jaitley, the rule is quite favorable.
He said: “Speaking for myself, I feel it was based on good rationale, and the rationale behind the policy was, when somebody eyes such a large market, obviously job creation also is something government of India is concerned with.” He also emphasized on the point how the region can allow the company to do business without it creating job opportunities for its labor.
He further added that however certain exceptions can be allowed in specific high technological areas and the government will be the one to decide whether the application of Cupertino, Calif. firm falls within required criteria.
Currently, in India, Apple’s products are sold through distributors and it hasn’t been any time before than late that the tech giant has opened its iOS development center in the country which caters to the users’ need of support help along with working and developing future app-makers.
The Indian government has been quite vocal about its “Make In India” campaign. Earlier when Apple proposed selling second hand and refurbished smartphones in the country then the company faced a lot of opposition. Last month Apple CEO Tim Cook visited the country for the talks. He had expressed that US tech leviathan’s presence in the country will be playing crucial play for accelerating company’s sales in the next decade however the iPhone maker’s has to cautiously penetrate into an already saturated market where the smartphone prices begin with $100 –a significantly economical amount as compared to Apple’s prestigious phones which have the price range of $600 or above.
To mitigate the high prices Apple came up with a proposal of selling refurbished phones in affordable and economical prices however the proposal got rejected by the government. Also, the local manufacturers showed concerns that by doing this, the interest of the local market will be majorly affected. Moreover, the idea of getting the “waste” in the India offended the country’s personnel as well as minister of commerce and industry, Nirmala Sitharaman said that, “We are not in favor of any company selling used phones in the company, however certified they may be.”
The Silicon Valley tech titan is planning to have strong presence in the country however it has to overcome all the hurdles which are coming in its way to guarantee a success.
As of now, at the market which closed on Friday, the tech giant stock stood at a price of $100.35.