India s finance minister has ratified a decision that Apple Inc. must meet local sourcing rules to open its own stores, according to people familiar with the matter, dealing what may be a fatal blow to the iPhone maker s effort to open retail outlets in the country.Minister Arun Jaitley decided to support the decision by India s Foreign Investment Promotion Board that Apple will have to procure 30 percent of components locally if it wants to sell through its own retail stores, said the people, asking not to be identified because the matter is private.
The company makes most of its products in China and doesn t currently meet that criteria.Apple Chief Executive Officer Tim Cook went to India last week for the first time as he seeks to capitalize on the market s prospects and revive his company s growth.
India has become the world s fastest-growing smartphone market, with a billion devices forecast to be sold over the next five years.
Apple has little market share in the country now, as consumers opt for less expensive devices from rivals such as Samsung Electronics Co. and Micromax Informatics Ltd.India seeks to encourage companies to make products in the country as part of its industrial policy, aimed at reaping the benefits that come from manufacturing facilities and jobs.
Malik couldn t immediately be reached for comment.
In price-conscious India, most phones are bought at small, congested street-corner shops and carriers typically don t subsidize handsets through calling plans.