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Apple must meet a strict rule that requires foreign retailers to sell at least 30% locally-sourced goods if it wishes to open stores in India, reports Reuters. A change in legislation last year exempted foreign retailers selling high-tech goods from the rule, but a government official told the outlet that Apple’s products don’t qualify for the category.

“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. The waiver is available only for investment in “state of the art” or “cutting-edge technology”, he added.

This is a significant set back for Apple, who had been reportedly planning to open its first 3 retail stores in India by the end of next year. CEO Tim Cook has spoken multiples times about how important the thus-far untapped market is to the company, amidst slowing iPhone sales, and backed it up with a high-profile trip to the country last week.

Source: Reuters