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Apple Not Allowed To Open Stores In India (reuters.com) 242

ffkom writes: Reuters reports: "India has said Apple Inc must meet a rule obliging foreign retailers to sell at least 30 percent locally-sourced goods if it wishes to open stores in the country, a senior government official told Reuters. A change in legislation last year exempted foreign retailers selling high-tech goods from the rule, which states 30 percent of the value of goods sold in the store should be made in India. However, Apple's products were not considered to be in this category, said the official, who has direct knowledge of the matter." Now just imagine what Apple stores in the U.S. would look like if 30% of their offerings had to be made in the US... "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. Apple planned to open at least three stores in India by the end of 2017. Separate sources said Apple talked with the Indian government about a relaxation of the rule before it filed an application to open stores in the country in January. In a report from The Wall Street Journal (Warning: source may be paywalled), one of India's government officials said, "We are sticking to the old policy. We want local sourcing for job creation. You can't have a situation where people view India only as a market. Let them start doing some manufacturing here." Currently, Apple sells its products "through a network of Indian-owned distribution companies and retailers."
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Apple Not Allowed To Open Stores In India

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  • by Anonymous Coward on Friday May 27, 2016 @03:14AM (#52193261)
    Apple will open its wallet and everything will change. Indian bureaucrats and officials care about one thing: bribe money.
    • Apple will open its wallet and everything will change. Indian bureaucrats and officials care about one thing: bribe money.

      Took the words right out of my mouth. I read the phrase in the description "The decision was taken only after a thorough examination of their application," the source said." to mean "Someone didn't get their kickback".

    • I can't believe this kind of idiotic remark gets a 5 rating.
      For this permission, Apple had to deal with the highest echelons of the Indian government, which in the last two years has been fully cleaned up by the new PM and his team.
      Broad brush remarks like this need to be voted down, not up!

  • by DNS-and-BIND ( 461968 ) on Friday May 27, 2016 @03:20AM (#52193281) Homepage
    These policies are clearly jingoistic and nativistic. Why should the people of one country be privileged over the people of any other? Just because they were born there? That's not thinking globally. That's the kind of thinking that leads people to believe that building walls is the solution to problems.
    • by dbIII ( 701233 ) on Friday May 27, 2016 @04:29AM (#52193443)

      These policies are clearly jingoistic and nativistic

      Indeed, just like the protectionism of the Florida sugar growers led to corn syrup in everything and protectionism of steel led to both heavy industry moving offshore and a steel industry that failed to innovate.
      It happens a lot, even where you are sitting, is often stupid and can have unintended consequences.

    • by jma05 ( 897351 ) on Friday May 27, 2016 @05:01AM (#52193521)

      You are ignoring the fact that India was colonized and used as nothing but as a market for centuries and sucked dry. Those scars will take a long while to heal and those are lessons not easily forgotten. The word "Free Trade" has a different meaning to an Indian (as well as to those who also endured the Opium Wars and the Black Ships incident in their history). They had completely different experiences with it in their history. This is a rational strategy from those experiences.

      Likewise the idea of protectionism has cold war era connotations in US; not so in India. It was a necessarily strategy for India to protect itself from neo-colonialism when its capacity to compete was never allowed to mature. India started rolling back these defenses (which naturally hold back growth - security vs. speed) gradually once it felt its industries and services are maturing and have a chance to actually compete in a free market. But that is a gradual process rather than a binary choice.

      > Why should the people of one country be privileged over the people of any other? Just because they were born there?

      That said, I generally agree with the sentiment. But even the majority in US don't agree with that.

      • by Impy the Impiuos Imp ( 442658 ) on Friday May 27, 2016 @07:58AM (#52194045) Journal

        > sucked dry

        The only thing sucking India dry is the corruption, where one looks to go into government so one can earn a nice life demanding kickbacks.

        This puts the brakes on economic development as surely as mafia kickbacks, warlordism, and kings demanding cuts and permission to do anything does.

      • by Maxwell ( 13985 )
        India also has 'policies' in place that prevent their "industries from maturing". They will never be mature. They'll never have large scale factories, infrastructure, power etc. because of those very same policies. That's why everything is made ABI (Anywhere But India). They have to either a) drop the policies preventing manufacturing or b) drop the policies about local content. They can't have it both ways.
    • And why stop there; why should one person privileged over another? just because he has a better brain/work-ethics/looks/family/contacts? If you truly believe this, then probably I can send you some charities contact so you can transfer some funds.
    • Because its their country? Who else is going to defend the rights of people who share a geographical area and what the fuck is the point of being part of a society (e.g. nation) if it won't specifically look after its members?

      More specifically - why should Indians or anyone else think globally without thinking locally first? To me it just sounds like a mantra spewed out by those with other agendas. Honestly, fuck global until all people have complete and unlimited access to all markets - job markets, housin

    • You have it somehow reversed!

      Why should people (companies) from the mighty imperialistic empire of the United States have the priviledge to stumb over all business all over the world?

      And if they can not by normal means they lobby trade agreements like TIPP etc.

      Regarding a company that sells electronics, I have no idea how much sense that rule makes. But for clothing, food and consumer goods, it certainly makes sense.

      Developing and third world countries are already messed up enough by hostile economic activi

    • by NormalVisual ( 565491 ) on Friday May 27, 2016 @08:36AM (#52194183)
      Why should the people of one country be privileged over the people of any other? Just because they were born there? That's not thinking globally.

      The same thought logically extends to "why should any person be privileged over any other?", in which case you're a bad person if you're living above subsistence level, because there are always others with less and you should forgo your own well-being because helping those less fortunate is more important.

      I expect my government to do that which is in my country's best interests, and I expect other countries' governments to similarly look after their own citizens. If they happen to coincide to benefit both of us, great. If not, I expect my country's benefit to be of prime importance. You can call me "jingoistic and nativistic" all you want.
    • Nice in theory, not in practice. If you want free movement of goods, you should also allow free movement of labor - after all, as per capitalist theory, labor is also a good. Wanna open up your borders completely then? Fight against millions of hungry, aggressive, undercutting Indians and Chinese for your job? If you ain't willing to have free movement of labor, don't talk about free movement of goods.

      The US, till fairly recently used to have tariff walls that were a mile high. And even today, as someone el

    • And it will probably be staffed by robots, which means that there won't be many extra jobs for the local people. There will be a few jobs during construction, and then the factory will be mostly automated.

      • And it will probably be staffed by robots, which means that there won't be many extra jobs for the local people. There will be a few jobs during construction, and then the factory will be mostly automated.

        So?

        Rule 1 of Law Making: If you make laws to achieve something, make fucking sure that the letter of the law says that what you want to achieve should be done. Don't write it so the invisible hand takes care of it, because that's not how it fucking works.

        • by tom229 ( 1640685 )
          Rule 1 of making laws like this should be: your law will always be circumvented or counteracted by unforeseen circumstances requiring new laws to be created ad infinitium. Every generation seems to produce a new wave a bureaucrats that thinks they must be smarter than the infinitely mutable attributes of markets and human populations. What desperately needs to be taught is that no one is, or ever will be.
      • And it will probably be staffed by robots, which means that there won't be many extra jobs for the local people. There will be a few jobs during construction, and then the factory will be mostly automated.

        And is Apple supposed to open a robot factory in every country it sells in? The whole point of a common market is trade between nations is a benefit to all.

    • I have a better idea. Make 30% of the floor space dedicated to incense & incense holders. Indians love incense!
      • by ghoul ( 157158 )

        This may work as after all people who buy Apple products are those who value form over function and a cool incense burning Hippie culture fits in with the Mac culture.

      • Unless the incense is priced similar to the iShit devices, this won't work.

    • by dafradu ( 868234 )

      That is exactly what they wanted. Similar practices are also common in Brazil, but here they usually go for heavy taxes for imported goods. If they make x% of the parts here, import the rest and put it together here the taxes are much lower.

  • Problem is (Score:5, Funny)

    by mikeburke ( 683778 ) on Friday May 27, 2016 @03:52AM (#52193355)
    They didn't do the needful.
    • They didn't do the needful.

      No problem.

    • Finally a govt has called out what everyone has known. Apple's products are not technologically cutting edge hence not eligible for the waiver.

      Much more advanced Android phones are manufactured in India so their is nothing preventing Apple from manufacturing in India.

      Apple is anyway known for taking technology invented by others and repackaging it in beauitful formats.

      Its the same technologically as a marketing firm (you can know a company' core capabilities by seeing who has status - at Google its the Engi

  • by Tablizer ( 95088 ) on Friday May 27, 2016 @03:52AM (#52193357) Journal

    They want the upsides of open trade, such as H1B wages flowing back to India and offshore outsourcing setting up shop, but NOT the downsides, such as allowing foreign products in that may reduce local jobs. This frustrates Americans to no end.

    • Yeah, fuck them, play by our rules damn you! You can't just invent shit that benefits your country and keeps others from ripping you off. We patented that!

    • I've never seen as many straw men in one place in all my life as there are in this article.
      Nobody has said anything about not allowing foreign products in. They are already selling as many iphones as they want. Just not in Apple stores.

  • Protectionism is only a benefit to bad companies, good companies will suffer.
  • Stores being required to sell 30% domestic crap.

    99% of the stores would have to close shop. Including car dealerships.

    • Stores being required to sell 30% domestic crap.

      99% of the stores would have to close shop. Including car dealerships.

      As opposed to 100% foreign crap? According to a quick google search India produced over 4 million cars last year (http://www.oica.net/category/production-statistics/). It doesn't say they have to be Indian things just made in India. All apple would need to do is open a factory to make 30% of iphones sold in India. Except apple don't make things they pay others bottom dollar to make it as cheap as possible and I guess India isn't cheap enough.

    • 99% of the stores would have to close shop. Including car dealerships.

      Way less than 99% of the car dealerships would close, because even many "foreign" cars are actually built right here in the USA. It's important to know this, because what you really want is a car built in Japan or Germany so that it doesn't fucking suck.

  • Shortsighted? (Score:4, Interesting)

    by angel'o'sphere ( 80593 ) on Friday May 27, 2016 @05:22AM (#52193591) Journal

    I already have seen the comments below, crying mordio about how that hurts the indian economics.
    Sorry guys, no idea ... I see no difference in that law to the american 'cars can only be sold by dealers' and other 'stupid' laws.

    Can't be so hard for Apple to sell Displays and Hard-Drives etc. from Indian origin or simply add an entertainment section and sell Bollywood DVDs. Also as Apple usually gives discounts to Students, it would surely be a lever to point that out to the local government.

    However, it is shortsighted because in my (limited) experience Apple Stores are stores with an incredible huge staffing. You never wait in a line at a cashier, or wait for a personal answering questions. Usually the next closest staff person comes and helps you with questions and bills you right away. You just give him the credit card, he puts it into a small device or makes a photo with his iPhone. If you already are a customer, nothing more is to be done (iTunes or Apple), he asks if you want a bill, if yes, via post or eMail, and thats it.

    You only need to go to a cashier if you want to pay cash or with special European cards (EC, Maestro etc.)

    You basically go to a shelf, take your stuff and leave.

    The Apple Shop in Paris at the Lovre easily has over 50 sales staff. And that means with 16 business hours something like 100 + a bit of management etc.

    • I think the problem is that it seems from reading the article that "30 percent of the value of goods sold in the store should be made in India". That means even if 30% of the items they stock are made in India, there's a chance that they might not meet the quota if nobody buys those products. If only 30% of the products in the store had to be made in India, it would be trivially easy to get around it by offering for sale a single high priced item that was equivalent to 30%, even if nobody bought it. You ca

    • > I see no difference in that law to the american 'cars
      > can only be sold by dealers' and other 'stupid' laws.

      Neither do I. But, if you will recall, the car dealership protectionism laws are also nearly universally reviled; not just here on slashdot, but by pretty much anyone who's had the displeasure of doing business with their ilk.

  • I think that requiring stores to sell a % of goods from the local market makes good sense.
  • How can you sell 30% locally sourced goods until you open up shop and see what people buy? I mean let's say Apple has for sale some accessory Indian made, maybe it would make up 30% of sales, who knows until you open your doors?

    • Amazingly, even very rich companies like Apple do some research before they spend money opening a new store. They'll have an idea what sort of revenue a given store is expected to produce. As such, they have all the information they need to figure out what local products they'd need to make 30% of the new revenue total be locally produced. Alternatively, Apple could make a few products in India, and thus 100% of their revenue would be 'local' and so would offset a lot of the revenue from imports, again thou

  • by Required Snark ( 1702878 ) on Friday May 27, 2016 @05:49AM (#52193677)
    So who is allowed to sell electronics in India? Do Korean, Japanese and Chinese electronics companies have facilities in India? Are there many locally made cell phones or TVs? Are there wafer fab lines? How does this work exactly? Has this problem occurred for other international manufacturers?
    • Re: (Score:3, Informative)

      by Anonymous Coward

      None of them run retails stores. To answer your questions: anyone, yes, yes, yes, it just works, no.

  • Looking at large stores, I believe they should do that in more countries. Can you imagine what that would do for e.g. Walmart?

  • Brain dead. (Score:2, Insightful)

    by jcr ( 53032 )

    Sad to see that India hasn't fully thrown off the economic ignorance that stifled their growth from independence until the late 1980s. Protectionism is nearly as stupid as price controls.

    -jcr

    • Sad to see that India hasn't fully thrown off the economic ignorance that stifled their growth from independence until the late 1980s. Protectionism is nearly as stupid as price controls.

      -jcr

      My personal favorite is the excuse above that currently pretty highly rated that claims that India was colonized and "sucked dry" - wah wah wah. Funny how Japan, South Korea and Taiwan have all prospered recently, to name but 3 countries all were industrialized in less time than India has been independent, but pity poor poor India and how it will suffer for apparently generations to come.

  • Apple opens a store that sells both China-made computers AND locally-made jewelry. I bet you could get people to buy Apple-themed jewelry. Make it an India exclusive and you'll have tons of people buying it just to export.

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