AAPL Apple Inc

By Rajesh Roy and Newley Purnell 

India's minister for commerce and industry said she supports waiving rules that threaten to block Apple Inc.'s retail stores, offering new hope for the tech company's bid in the country.

The finance ministry "has taken a different line," Nirmala Sitharaman told reporters at a news conference Monday. "We will talk to them."

At issue is a requirement that foreign-owned single-brand retailers buy at least 30% of their manufacturing materials from Indian vendors. Apple in January said it had sought government permission to open its own retail stores, which would help it fight the stiff competition from low-cost rivals in the country, set to overtake the U.S. as the world's second-largest smartphone market after China.

Last month, a government panel recommended waiving the local-sourcing rule for Apple, but the Foreign Investment Promotion Board--a panel of bureaucrats that gives the final go-ahead to foreign-investment proposals--disagreed, as did Finance Minister Arun Jaitley, two government officials told The Wall Street Journal last week.

It is unclear who has the final say. When asked, Ms. Sitharaman said, "It's the government. We are all part of it."

An Apple spokeswoman declined to comment.

Ms. Sitharaman said her ministry opposes a separate application by Apple to sell refurbished phones in India, whether imported or refurbished locally. That proposal is currently being considered by the Environment Ministry in consultation with the prime minister's Office.

The apparent disagreement within the government could reflect a desire for more clarity from Apple about how much it intends to invest in India, said Tarun Pathak, a Delhi-based analyst at technology research firm Counterpoint.

Apple Chief Executive Tim Cook visited India this month on a charm offensive, meeting with Prime Minister Narendra Modi to discuss his company's manufacturing and retailing plans, watching a cricket match and posing for photographs with Bollywood stars.

During the visit Apple announced plans to open two new offices in India to foster the development of mobile apps and mapping services in the country.

India, in pursuit of long-term growth, wants to leverage Apple's interest to attract investment and create manufacturing facilities and jobs.

"At the higher levels they are more concerned about what Apple is doing in India," Mr. Pathak said.

Write to Rajesh Roy at rajesh.roy@wsj.com and Newley Purnell at newley.purnell @wsj.com

(END) Dow Jones Newswires

May 30, 2016 07:58 ET (11:58 GMT)

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