India officially rejects Apple's bid to sell refurbished iPhones in the country
Demand for the Apple iPhone is high in India. During the company's fiscal second quarter, a period that saw Apple announce lower year-over-year iPhone sales for the first time in history, sales of the device in the country rose 56% year-over-year led by sales of the $300 Apple iPhone 5s.
In making the announcement, commerce and industry minister Nirmala Sitharaman curtly commented, "We are not in favor of any company selling used phones in the country, however certified they may be." This was the second rejection Apple suffered recently from the Indian government. Last week, Apple's request to be exempt from the current regulation that requires 30% of goods sold in retail stores to be locally sourced, was denied. The tech titan had hoped that opening Apple Stores in the market would raise brand awareness.
Apple might yet be able to get a waiver on this condition since the commerce ministry wanted to grant Apple the waiver, only to be overturned by the finance ministry. Both ministries will get together to see if they can reach a compromise. "We took a line that we would not mind waiving the 30% local sourcing norm for Apple," stated the commerce minister. "Now, the finance ministry has taken a different position. We will examine the matter in consultation with the finance ministry," Sitharaman said.
India is a major focus for Apple, but is a contradiction. In 2017, it will become the second largest smartphone market in the world after China. Yet 70% of new smartphone sales were priced under $150 last year. Most of the sales are made by local smartphone manufacturers who build low-priced Android models.