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

Apple's plan to open three Apple Store locations (http://www.macrumors.com/2016/05/16/apple-stores-india-within-18-months/) in India may fall through following a ruling from the Indian finance ministry that says Apple must sell locally sourced goods if it wants to open stores in the country, reports Reuters (http://www.reuters.com/article/us-apple-india-idUSKCN0YG2LW).





In India, 30 percent of goods sold by foreign companies must be manufactured or produced in the country, a requirement Apple does not meet as its products are largely made in China. India last year exempted retailers selling state-of-the-art goods from the rule, prompting Apple to file a new application with the Indian government.





(http://cdn.macrumors.com/article-new/2012/01/indian_flag.jpg)


Apple was expected to receive an exemption from the rule, earning a recommendation (http://www.macrumors.com/2016/04/28/india-approves-single-branded-apple-retail-stores/) 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.

"They did ask for a waiver but didn't provide any material on record to justify it. The decision was taken only after a thorough examination of their application," the source said.





The waiver is available only for investment in "state of the art" or "cutting-edge technology", he added.

Without the ability to open its own retail stores in the country, Apple will need to continue selling iOS and Mac devices in India through third-party distributors. Apple is eager to expand its business in India as it is a largely untapped market. Last quarter (http://www.macrumors.com/2016/05/18/tim-cook-india-visit-mumbai-temple/), Apple saw its revenue from India grow 56 percent, surpassing $1 billion.





The ministry of finance's ruling comes just after Tim Cook (http://www.macrumors.com/roundup/tim-cook/) spent several days in India, where he met with (http://www.macrumors.com/2016/05/21/tim-cook-meets-india-pm-launches-app/) Prime Minister Narendra Modi and other local business leaders (http://www.macrumors.com/2016/05/20/tim-cook-india-trip-bollywood-cricket-solar/), actors, politicians, and developers.





Apple has also announced the launch of a Maps development center (http://www.macrumors.com/2016/05/19/apple-hyderabad-maps-development/) in Hyderabad and an iOS app and design accelerator (http://www.macrumors.com/2016/05/18/apple-app-development-accelerator-india/) in Bangalore.

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Source: Apple Not Able to Open Retail Stores in India Without Selling 30% Locally Sourced Goods (http://www.macrumors.com/2016/05/25/apple-retail-stores-in-india-waiver-denied/)