The recent tug-of-war between our government and Apple has reached a new impasse. In a slightly bewildering turn of the events, Apple has threatened declared that if the government doesn’t give it a special waiver, it will not open Apple Stores in India.
If you haven’t been following the news, here’s a summary of all the bouts in this heavyweight boxing match:
Round 1: Indian government announces changes in FDI norms. Single brand retailers can now set up shops in India.
Round 2: Following the ‘Make hay while the sun shines’ idiom, Apple applies for a licence to open Apple Stores.
Round 3: Government gives Apple the green light, but insists that 30% of their products must be sourced locally (from within India) — a standard rule.
Round 4: Apple thinks it will compromise their quality. It applies for a waiver of the local sourcing law, claiming exemption on grounds that it is a “cutting edge” technology provider.
Round 5: Government says they’ll consider the proposal. There were high expectations that the application would go through.
Round 6: Apple’s application gets rejected. (Ouch!) The government says Apple will have to comply with 30% rule.
Round 7: Apple says it will not open a shop in India if the exemption to the rule is not granted for them. Apple ne toh dil pe le liya yaar!
As you probably know by now, all single-brand retail stores in India are obligated to source 30% of their produce locally. Which means that at least a third of all the things they sell must be produced in India itself. Same goes for Apple.
Fearing that their quality will be compromised, Apple wants to circumnavigate that limitation. The government after mulling over in great detail, crushed that petition in a recent announcement.
Now Apple has gone on the offensive and announced that it would withdraw the Store from India altogether, but not give up control of production.
What’s the current situation?
Obviously, Team Cook and Team Modi are not on the best of terms. The situation looks to be quite dire for folks from Cupertino, though.
An unnamed source was quoted as saying by the Economic Times:
Apple wants a no-obligation clearance for setting up its stores, since it is not sure about manufacturing anything in the country immediately. It had plans to refurbish iPhones in India and sell it to consumers, but since the proposal has been turned down, local activity around it too is not going to happen.
What do we think?
We think Apple should take the offer. Right now, setting up a Store is essential to their long-term plan. Once the store is set up and once Apple establishes itself as a top brand, it can then ask for exceptions based on their superior technology.
How likely is Apple to carry out the threat?
Apple is riding on the high from their recent win against the FBI. To paraphrase the words of the Kingslayer from the most recent Game of Thrones episode: “Only a fool would make a threat he’s not prepared to carry out.”
Quality has been the cornerstone of brand Apple since its very inception. Even when it was a struggling startup operating out of a garage, it did not compromise on standards. Today it’s a multi-billion dollar behemoth with the ability to take on governments. It’s not likely to compromise now.
Can there be no compromise?
The problem is because of the publicity the issue has gained, we’re past the phase where it can be solved with back door negotiations. If there is to be a resolution, it can only come about with changes in policy. And that seems highly unlikely.
For each side, it’s now about saving face. And we fear that in the cross-fire of egos, the collateral damage is going to be our poor pockets!
Update: Times of India is reporting that the two might have reached a compromise after all! Apparently, the government has agreed to give Apple a 2-3 years’ grace period to begin with. During this time, Apple will be exempted from the local sourcing norms; by then end of which, Apple must have figured out a way to accommodate the rule.
A “source close to the government” had reportedly said that this is being considered so as to provide Apple with a fair chance to establish themselves before enforcing the rule. Seems like Tim Cook’s meeting with Modi wasn’t a complete waste of time after all!!
Catch up on all the news related to this issue by following the Apple Store discussions on our blog.
Yes the government should Agree with Apple company. Best for Apple lover and creators in low price. And Stop the junk phone in indian markets. Plz Government agree with apple
Government should agree to apple s conditions. Support apple for their quality products