Apple’s refurbished iPhone plan: Govt not in favour of selling used goods

The Indian government is reconsidering its decision on allowing Apple’s proposal to waive the mandatory 30% local sourcing norm. If allowed, there will be no more Apple reseller stores in India, but the iPhone maker can directly start retailing.

In what might spell some relief for the iPhone maker, commerce minister Nirmala Sitharaman on Monday said that her department is in talks with finance ministry to reconsider Apple Inc’s foreign direct investment proposal that seeks a waiver from the country’s local sourcing rules.

If allowed, there will be no more Apple resellers in India, but the iPhone maker can directly start retailing from their own stores.

Commerce ministry is in favour of local sourcing waiver for Apple to open single brand retail stores in India. But Finance Ministry took a different stance. “We are in talks with them”, Sitharaman said.

The move comes days after the Foreign Investment and Promotion Board (FIPB) — the nodal agency for clearing investment proposals by overseas companies — cleared Apple Inc’s plans to set up retail outlets in the country, but said that the iPhone maker must comply with 30% local sourcing rules.

However, Sitharaman clarified that the government is not in favour of used or remodelled goods being sold in India, referring to Apple’s proposal of selling refurbished handsets in India.

She added the government will bring in more clarity in the current guidelines if required, explaining the definition of “cutting-edge-technology and state-of-the-art-technology”.

According to Indian rules, a panel in the Department of Investment Policy and Promotion (DIPP) first approves a company’s application, and then sends it to FIPB for a formal clearance. Reports said that DIPP had approved Apple’s proposal to open retail stores in the country without the 30% sourcing rider.

The government can relax mandatory local sourcing norms for companies, which undertake single-brand retailing of products and have state-of-the-art and cutting-edge technology, and where local sourcing is not possible.
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