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Apple Not Allowed To Open Stores In India (reuters.com)

ffkom writes: Reuters reports: "India has said Apple Inc must meet a rule obliging foreign retailers to sell at least 30 percent locally-sourced goods if it wishes to open stores in the country, a senior government official told Reuters. A change in legislation last year exempted foreign retailers selling high-tech goods from the rule, which states 30 percent of the value of goods sold in the store should be made in India. However, Apple's products were not considered to be in this category, said the official, who has direct knowledge of the matter." Now just imagine what Apple stores in the U.S. would look like if 30% of their offerings had to be made in the US... "They did ask for a waiver but didn't provide any material on record to justify it. The decision was taken only after a thorough examination of their application," the source said. Apple planned to open at least three stores in India by the end of 2017. Separate sources said Apple talked with the Indian government about a relaxation of the rule before it filed an application to open stores in the country in January. In a report from The Wall Street Journal (Warning: source may be paywalled), one of India's government officials said, "We are sticking to the old policy. We want local sourcing for job creation. You can't have a situation where people view India only as a market. Let them start doing some manufacturing here." Currently, Apple sells its products "through a network of Indian-owned distribution companies and retailers."

18 of 242 comments (clear)

  1. Indian bureaucrats looking for a payday by Anonymous Coward · · Score: 5, Insightful

    Apple will open its wallet and everything will change. Indian bureaucrats and officials care about one thing: bribe money.

    1. Re:Indian bureaucrats looking for a payday by Lally+Singh · · Score: 4, Insightful

      Yeah, but Apple's got the Foreign Corrupt Practices Act (https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act) to worry about. They /can't/ pay bribes.

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  2. Jingoism and Nativism by DNS-and-BIND · · Score: 2, Insightful

    These policies are clearly jingoistic and nativistic. Why should the people of one country be privileged over the people of any other? Just because they were born there? That's not thinking globally. That's the kind of thinking that leads people to believe that building walls is the solution to problems.

    --
    Shutting down free speech with violence isn't fighting fascism. It IS fascism!
    1. Re:Jingoism and Nativism by Anonymous Coward · · Score: 1, Insightful

      That's not thinking globally

      The phrase goes "Think globally - Act locally". The act locally part is routinely ignored so that you'll end up having rebels all the way from communists to Islamists.

    2. Re:Jingoism and Nativism by dbIII · · Score: 4, Insightful

      These policies are clearly jingoistic and nativistic

      Indeed, just like the protectionism of the Florida sugar growers led to corn syrup in everything and protectionism of steel led to both heavy industry moving offshore and a steel industry that failed to innovate.
      It happens a lot, even where you are sitting, is often stupid and can have unintended consequences.

    3. Re:Jingoism and Nativism by jma05 · · Score: 5, Insightful

      You are ignoring the fact that India was colonized and used as nothing but as a market for centuries and sucked dry. Those scars will take a long while to heal and those are lessons not easily forgotten. The word "Free Trade" has a different meaning to an Indian (as well as to those who also endured the Opium Wars and the Black Ships incident in their history). They had completely different experiences with it in their history. This is a rational strategy from those experiences.

      Likewise the idea of protectionism has cold war era connotations in US; not so in India. It was a necessarily strategy for India to protect itself from neo-colonialism when its capacity to compete was never allowed to mature. India started rolling back these defenses (which naturally hold back growth - security vs. speed) gradually once it felt its industries and services are maturing and have a chance to actually compete in a free market. But that is a gradual process rather than a binary choice.

      > Why should the people of one country be privileged over the people of any other? Just because they were born there?

      That said, I generally agree with the sentiment. But even the majority in US don't agree with that.

    4. Re:Jingoism and Nativism by Daemonik · · Score: 3, Insightful

      Yes, artificially inflating the price of the product that's being dumped into your country at a price that would eliminate competition and thus local jobs is the point.

      Prove that all foreign goods are "best" products. Go on. What good is the "best" product anyway if no one in your country can afford it because they don't have jobs?

      When the day comes that an Indian, American, European or Chinese laborer can work for the same wage and pay the same cost of living anywhere on the planet, then we can all be happy global citizens. Until then, when you live in a country with an economic disadvantage your government should do what it can to balance that disadvantage.

    5. Re: Jingoism and Nativism by stealth_finger · · Score: 5, Insightful

      Well I'm not sure what a "good lying job" is, but ... solution my ass. India is a huge exporter and makes lots of money out of selling things overseas, but they don't want imported goods sold in their own country? If other countries adopted this kind of measure, India would suffer more than most countries.

      Where did it say they don't want imported goods. What I read was if a foreign company wants to set up shop 30% of value of the goods needs to be made in india. Seems fair enough to me, as it stands every apple store has almost 100% of the value of products made in china.

      Why do you think it's ok to abuse the shit out the world like that? These guys over here will work for nothing so we can slave them, then take the product and sell it for way way more than it cost to make over to these guys who have lots of money (but not for long because all the jobs are being fucked off overseas because it cheaper.) Meanwhile we're taking in all the money from underpaying and overcharging. If you really want a global market then a person in chinatown, china needs to get paid the same as a person in bumsville, usa or ruskigrad, russia etc and the product should cost the same no matter where you go. But they don't do they? They abuse the system from all sides making their huge pile of money huger and by extension making everyone else poorer. Fuck this so called 'globalism'.

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    6. Re: Jingoism and Nativism by Godwin+O'Hitler · · Score: 3, Insightful

      So allowing a shop to sell 70% of imported goods can be considered as not wanting imported goods. Right.

      --
      No, your children are not the special ones. Nor are your pets.
    7. Re:Jingoism and Nativism by stealth_finger · · Score: 2, Insightful

      ...that brainwashes people to believe somehow the people in the country you belong to are more important than anyone else

      And it is, to me, and where you live should be to you. The economy somewhere else is of little consequence to me when the economy around me is falling apart. So what if making stuff locally costs a bit more? When everyone has jobs and money is moving around it doesn't matter. It's not like apple sell their wares for cost + a reasonable profit, no they get their stuff made as cheaply as possible then jack the price up to literally the highest they can get away with and pocket the difference. Would you not prefer to support your neighbor having a job than support his welfare because his factory job has been moved to china where the people will work for a fraction of the money. I suppose you won't mind when you get sacked because they can get someone somewhere else to do whatever you do cheaper. I mean they're just as important, right?

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    8. Re:Jingoism and Nativism by DNS-and-BIND · · Score: 3, Insightful

      "Our country first, our people first" is Trumpism. Blaming foreigners for your own problems is Trumpism as well. How do you conservatives look at yourselves in the mirror in the morning? What's it feel like to be a nationalistic jingoist?

      --
      Shutting down free speech with violence isn't fighting fascism. It IS fascism!
    9. Re:Jingoism and Nativism by hjf · · Score: 4, Insightful

      I live in Argentina. We tried this experiment over the past 12 years. You know what happened? We still got imported products, by a company that hired people to put these products in a box and slap a "INDUSTRIA ARGENTINA" sticker on them. And charging 300% more than what the same product costs outside the country.

      Protectionism is also abused by those protected by it, to keep the status quo.

    10. Re:Jingoism and Nativism by Impy+the+Impiuos+Imp · · Score: 4, Insightful

      > sucked dry

      The only thing sucking India dry is the corruption, where one looks to go into government so one can earn a nice life demanding kickbacks.

      This puts the brakes on economic development as surely as mafia kickbacks, warlordism, and kings demanding cuts and permission to do anything does.

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    11. Re: Jingoism and Nativism by FooAtWFU · · Score: 3, Insightful

      Yes. Yes it can. Because that means you can't have a shop that really specializes in imported goods: you're burdening the shop operator with a responsibility to find local goods, stock them, sell them, keep track of exactly the amount sold of both, and stop selling the imported goods if the local goods aren't doing well enough (so unless you want to turn people away from time to time you'll need to maintain a decent safety margin). It rules out entire classes of very effective, proven business models (like the Apple store, or really anything you'd find in a mall that is focused on a certain brand. Swatch. Tumi. Banana Republic. Hugo Boss.)

      Retail operations cost money. Tacking on a 30%-local-goods operation isn't going to be straightforward for many businesses, and ensures that only the largest players operating at scale are going to be entering the market. A straight-up punitive tariff might be less harmful for many businesses.

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    12. Re:Jingoism and Nativism by bluefoxlucid · · Score: 4, Insightful

      The usual answer is a blunt "comparative advantage" or "economists have shown protectionism is bad", which, such as it is, basically implies you or the person arguing with you is too dumb to understand, thus fall back to buzzwords. Let's go with a more complete explanation.

      Let's say a producer in Maine can produce 8 tonnes of potato per acre, and 2 tonnes of melon per acre. A producer in Mexico can produce 8 tonnes of melon per acre, and 2 tonnes of potato per acre. The farm management techniques are similar, and so the costs are basically the same per acreage; thus melon costs 4 times as much to produce in Maine, and potato costs 4 times as much to produce in Mexico.

      So the guys in Maine normally produce potato for $100/tonne and melon for $400/tonne using 5 acres of land for 8 tonnes of each; while the guys in Mexico produce melon for $100/tonne and potato for $400/tonne using 5 acres of land for 8 tonnes of each. That's a lot of wasted money (read: human labor time) and land.

      So the guys in Maine instead produce 16 tonnes of potato on 2 acres of land at a price of $100/tonne; the guys in Mexico produce 16 tonnes of melon on 2 acres of land at a price of $100/tonne. It costs about $1,000 to ship 30 tonnes of freight, so these people trade and Mexico ends up with potato at $133/tonne, while Maine ends up with Melon at $133/tonne.

      Each side now has 60% of the land involved in producing 8 tonnes each potato and melon, and has reclaimed 60% of the labor (unemployment). As well, there is $66 per tonne or approximately 75% of the money unspent by the consumer base purchasing these products.

      Most people miss this next part.

      With that additional money, the consumers can now buy more products--including foreign imports, recycling the above process. Those products must be moved (shipping), accounted for (logistics), distributed (warehousing), and sold (retail), meaning the supply chain of melons, jeans, or cheap mechanical pencils creates a *lot* of local jobs (your local WalMart has a district manager under a regional manager; it has regional warehouses to stage goods for distribution across the district; and of course all those stores and the inventory, security, management, and service employees), paid for by the money saved via importing.

      In short: the labor freed up from the farm is repurposed. Maybe we start a manufacturing base (this happened after America's labor force started using intensive farming techniques and machines, cutting from 90% of the work force to today's ~2%). Maybe that gets shipped to China and we make more doctors and stuff like Netflix and cell phone networks. Maybe we just make more food. In any case, for the same labor and the same number of jobs, we end up with MORE STUFF.

      You might also notice: food is suddenly cheaper, since we're making 2.5 times as much for the same cost investment. Imagine it takes half the labor to produce all the goods you currently consumer--that means half the wages paid down the whole stack (right down to the coal miners), thus the same profit margins at half the PRICE. Your money can buy twice as much, so long as your wages aren't slashed, right? In this case, we haven't slashed hourly wages; we've slashed number of hours required to make a thing: one guy working for $10/hr still works 40 hours, and the other guy goes to do some other job; the things they both make cost half as much, and you can buy both of them, and support both their salaries.

      So you ask:

      How is "thinking globally" going to help me, Joe Random Small Person?

      Globalization increases wealth and creates jobs. I've done some *weak* analysis on a scenario in which the United States blockades China and brings all manufacture back to the U.S., and the result is people become *much* poorer on an individual basis (the people making Comcast High Speed Internet, T-Mobile's 4G network, and Netflix need to stop doing that and go work in these factories--we don't have the labor for

  3. Brain dead. by jcr · · Score: 1, Insightful

    Sad to see that India hasn't fully thrown off the economic ignorance that stifled their growth from independence until the late 1980s. Protectionism is nearly as stupid as price controls.

    -jcr

    --
    The only title of honor that a tyrant can grant is "Enemy of the State."
  4. Re: Simple solution by arth1 · · Score: 2, Insightful

    Every time I price out, e.g., a Lenovo Carbon X1, to match the specs of a Macbook Air; the Lenovo costs more.

    False dichotomy. If you were to spec a Macbook to match the specs of a Lenovo, you would likewise end up with a more expensive product.

    You're pre-supposing that the Macbook Air has the ultimate feature set which others should match.

    Others may want features like built-in HDMI, clip-on batteries, separate mic and headphone ports, changeable batteries and or HDs, a three button touchpad, upgradeable RAM or docking stations. Only by disregarding such choices because the Macbook doesn't offer them can you do a comparison to anything else. That will then be a biased comparison, favoring the Macbook Air even before you start.

  5. Re:The cost of structural unemployment by bluefoxlucid · · Score: 3, Insightful

    If you're unemployed, you can buy zero products.

    Correct. This is why the steady growth of technology across the past 200 years in America has supplied vast wealth with 4%-10% unemployment rates, while sharp steps forward in technology without uncorking any form of scarcity (e.g. the Industrial Revolution; automating every task at all McDonalds; self-driving cars) have caused history's greatest economic collapses.

    To be short and imprecise: technical progress causes transitional unemployment, and an economy is kept healthy by maximizing the rate of re-employment and stretching out the rate of transition to labor-reducing methods; this is optimally performed by keeping workers competitive with the technology which replaces them and highly-employable. The most effective way to keep workers highly-employable is to minimize their proportional wage-labor cost; technical progress tends to do that, as one employee's time handles the task of several employees thanks to new technology, thus that employee's wages are divided more finely across more units of product. Basic income schemes such as a Citizen's Dividend, tax plans which reduce payroll and sales taxes, and progressive taxes which reduce working-class taxes as the income gap widens address both ends of the equation.

    These are also more highly skilled professions, for which most of "the labor freed up from the farm" is likely unqualified. Who covers the cost of retraining?

    This is not entirely true for two reasons.

    First, we're exchanging numbers. A healthy economy has 4%-8% unemployment in the labor force; low unemployment leads to labor shortages (which staggers the economy), and high unemployment reduces the consumer base. If you unemploy 0.2% of your labor force during one year, then the new jobs may very well go to some of the other 4% or so who are already unemployed. In the United States, unemployment insurance only pays for 6 months, which means our social safety net relies on continuously exchanging out workers onto the unemployment line and bringing in other workers who were previously receiving unemployment aid (my Citizen's Dividend addresses this directly, because it's a reasonable policy, but a sub-optimal one; unemployment limits are negative punishment for not getting a job, while a Citizen's Dividend converts this to positive reinforcement by eliminating the negative punishment associated with *losing* your unemployment payment when you do get hired, thus any employment *only* makes you more wealthy).

    This, plus the nature of changing markets and a constantly-developing workforce, means the workforce training occurring among new labor market entrants (college students) changes to follow the changing technology trends, and so the retraining you cite is somewhat integrated. Again: you probably don't want to eliminate 5% of jobs in 2-3 years; that's a pretty high turn-over rate, and the economy won't often create new jobs that quickly (the Information Age was a highly-complex example).

    Second, much of the labor isn't highly-skilled labor. We've created a lot of blunt customer service jobs, truck loading/unloading jobs, cashier operators, and the like. Part of our growth is more grocery baggers and burger flippers; and we will necessarily want to replace our highly-skilled industrial machine operators with whatever moron can babysit a nearly-self-operating machine designed to be operated by whatever moron you can pull off the street. Look at most network software and hardware now: I could teach a completely computer-illiterate idiot to install Ubuntu and load arbitrary Web applications (OwnCloud, Gitlab, Wordpress, etc.) in maybe an hour; and the curious and persistent could figure it out on their own in half a day. My job as a skilled computer systems technician and engineer has become roughly equivalent to burger flipping.

    So we get a major growth in retail, shipping, and other low-skilled labor, while our skilled professional