India bars Apple from selling refurbished iPhones within its borders

iPhone SE
Jessica Lee Star / Digital Trends
Apple CEO Tim Cook’s recent meeting with India Prime Minister Narendra Modi apparently did not go well for Apple, seeing as India officially rejected Apple’s bid to sell refurbished iPhones in the country, LiveMint reported.

During a recent press conference, commerce and industry minister Nirmala Sitharaman confirmed the rejection, indicating that Apple was not granted any special permissions just because the refurbished iPhones would have originally come from the Cupertino company. “We are not in favour of any company selling used phones in the country, however certified they may be,” said Sitharaman.

This is a bitter pill for Apple to swallow, since the company does view the Indian smartphone market as one it wants to capitalize on. During Apple’s recent earnings call, Cook compared India today to where China was seven to ten years ago, with the CEO saying “there’s a great opportunity there.” Furthermore, Apple shipped 1.9 million iPhones to India in 2015, with sales in India seeing 56-percent growth during the company’s latest financial quarter, so there is clearly interest from Indian customers.

Unfortunately, Apple’s recent attempts to establish a physical presence in the country have come up dry. Back in April, Apple submitted a request to open official retail stores on Indian soil, but that request was denied. The problem was that Apple wanted the Indian government to waive the 30-percent local sourcing rule that other companies in the country must abide by in order to conduct business there, a rule that the government did not want to exempt Apple from following.

Even though Apple is clearly interest in the Indian smartphone market, its pricing model creates challenges in that market. Even though India is expected to overtake the U.S. as the world’s second-largest smartphone market, if a Morgan Stanley research report is to be believed, around 70 percent of new smartphone sales were handsets priced under $150. By comparison, the 16GB iPhone 6S goes for roughly $615.

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