Commerce Ministry refuses to budge on Apple selling refurbished phones

Amiti Sen New Delhi | Updated on January 20, 2018 Published on May 30, 2016

Commerce & Industry Minister Nirmala Sitharaman   -  BusinessLine

Start-ups’ request for longer tax holiday forwarded to FinMin: Sitharaman

US-based technology major Apple, which was recently refused a waiver from local sourcing conditions for opening its own stores in India by the Finance Ministry, has reasons to hope as the Commerce & Industry Ministry has decided to take up its cause.

“The Commerce & Industry Ministry, in particular reference to high-end technology related to single-brand retailing, took a line that it would not mind waiving the 30 per cent sourcing requirement for products already available in the market. Since people are already buying Apple products in India, the Ministry suggested that the local sourcing condition can be waived for the company (for opening its own stores). Now that the Finance Ministry has taken a different line, we will talk to them and see what can be done,” Commerce & Industry Minister Nirmala Sitharaman told reporters here on Monday.

The Minister, however, said her Ministry was not in favour of Apple selling refurbished phones in India.

In talks with FinMin

On whether the Ministry would be setting guidelines for establishing what should qualify as high-end products, Sitharaman said she would discuss the matter with the Finance Ministry to see what it has in mind.

The country’s legislation allows 100 per cent foreign direct investment in single-brand retail, subject to the condition of 30 per cent local sourcing of inputs, which could be waived if companies are selling “high-end’’ products.

There is already a panel in place, headed by Department of Industrial Policy & Promotion (DIPP) Ramesh Abhishek, to look into requests for waiver from local sourcing conditions from foreign companies that claim to retail high-end products. The panel had recommended a waiver for Apple which was subsequently turned down by the Finance Ministry. Chinese phone major Xiaomi, which had also earlier applied for exemption from the local sourcing condition to the panel, has now written a letter stating that it does not want an exemption as it is manufacturing in the country, Abhishek told reporters.

Tax sops for start-ups

On the request made by start-ups to increase tax holiday from three years to seven years, Sitharaman said the proposal had been forwarded to the Finance Ministry.

Addressing the media on the completion of two years of the BJP government at the Centre, she said India would try to sort out the dispute with the US at the World Trade Organisation over the steep increase in visa fees for non-immigrant workers and local content requirement in solar and other sectors in the US through bilateral engagement, failing which it would take up the next step (of asking for a dispute settlement panel).

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Published on May 30, 2016
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