Apple needs to apply afresh for opening retail stores

US technology giant Apple Inc will have to re-submit its application for opening single brand retail trade stores in the country and issues concerning "cutting edge" technology will be settled by the concerned administrative ministry, an official said.

In light of the changes in the FDI policy announced on June 21, the official said, Apple will have to submit fresh application for opening single brand retail stores to seek exemption from local sourcing norms.

Under the modified single brand FDI policy, companies using cutting edge technology will be exempted from meeting the local sourcing norm for first three years. Thereafter, in the next five years the company will have to meet the domestic sourcing norm at an annualised average rate of 30 percent.

"After a proposal comes to the DIPP, it will have to be decided by the concerned administrative ministry on whether a technology is cutting edge. It will be a case to case decision," the official said.

While the Finance Ministry wanted the Industry Ministry to put in place definition of 'cutting edge' technology, the DIPP insisted that said it was difficult to give a precise definition and the issue should be decided on case to case basis.

"The ministry concerned will have to look at parameters like the relevance and the nature of the technology used in the product to take a view. It has to be a consistent view," the official added.

As regards Apple, henceforth Department of Information and DeITY would take a call on whether it is bringing in cutting edge technology.

Apple has been lobbying hard for the exemption from the mandatory 30 percent local sourcing on the grounds that its products have such high-end technology and were therefore could not be sourced locally here.

The foreign investment promotion board (FIPB) had earlier allowed Apple to set up single brand stores in India but it didn't exempt it from the 30 percent local sourcing norm.

As Apple wanted relaxation from the sourcing norm, a DIPP Secretary headed panel recommended that the company could be considered for the relaxation, but the Finance Ministry rejected the suggestion.