Apple gets 8-year waiver from local sourcing rules

India has opened its door for Apple Inc to set up stores in India as the Modi government on Monday relaxed local sourcing requirements for single brand retailers.

As per the new FDI policy, the government has relaxed local sourcing norms for upto three years and a relaxed sou-rcing regime for another five years in the single brand retail for products having ‘state-of-art’ and ‘cutting edge’ technology.

Other single-brand retailers like Swedish giant IKEA also stand to benefit from it.

Currently, the single brand retailers have to source 30 per cent of their components locally.

Earlier, Apple had applied that it should be exempt from the sourcing norms as it products were state of the art. But a section in the government was not in favour of granting it such an exemption.

As a way out, it seems a new condition has been added to relax norms only for three years to allow Apple to test waters in India. It will have to be seen whether new norms are acceptable to Apple to set stores in India.

Department of Indust-rial Policy and Promot-ion (DIPP) secretary Ramesh Abhishek said Apple would be informed about the changes. “We will inform Apple Inc to indicate whether they would like to avail the new provisions,” he said.

India has been lobbying Apple and its partner Foxconn to begin manufacturing in the country.

India is keen to boost electronic manufacturing as earlier it was estimated that country’s electronics import bill will exceed that of oil by 2020. It was estimated that the demand for Indian electronics industry will cross $400 billion by the year 2020 out of which $300 billion will needed to be imported.

Apple is keen to increase its market share in India, which is world’s fastest-growing major smart phone market as its device sales are slowing in other parts of the world.

Apple CEO Tim Cook visited the country for the first time in May and met with Prime Minister Narendra Modi to outline his ambitions for the company in India.