Govt likely to exempt Apple from mandatory local sourcing rules

The government is likely to exempt iPhone and iPad maker Apple from mandatory local sourcing rule, a move which would pave the way for tech giant opening single-brand retail stores in the country.

The company had given a detailed presentation to a committee headed by DIPP Secretary Ramesh Abhishek on April 19, on its products, technology, innovations and camera.

By early next week, the Department of Industrial Policy and Promotion (DIPP) would send the proposal for final approval to Finance Ministry, sources said.

"The panel has looked into the detailed proposal. The committee feels that it is a fit case for exemption of the mandatory sourcing norms," they added.

The US-based company has sought approval from the government on setting up single-brand retail stores in the country.

As per the foreign direct investment (FDI) norms, the government may relax the mandatory local sourcing norms for entities undertaking single-brand retailing of products having state-of-the-art and cutting edge technology and where local sourcing is not possible.

The government had set up a committee to decide whether a product is state-of-the-art and can be eligible for exemption from the mandatory local sourcing applicable for FDI single brand retail trading.

At present, 100% FDI is permitted in a single-brand retail sector but companies are required to take Foreign Investment Promotion Board (FIPB) permission if the limit exceeds 49%.

The company sells its products through Apple-owned retail stores in countries including China, Germany, the US, the UK and France.

Apple has no wholly-owned store in India and sells its products through distributors such as Redington and Ingram Micro.

Chinese smartphone maker Xiaomi has also submitted an application to open stores in the country.