Live Mint:

Last month, a committee comprising Ramesh Abhishek, secretary, DIPP; a NITI Aayog member; and an officer from the department of electronics and information technology recommended to the finance ministry that the condition requiring single-brand retailers to source 30% of content locally should be waived for Apple, which had sought to open its own branded stores.

Tim Cook made a high visibility visit to India, in part to support the local sourcing waiver.

But:

A government official said on condition of anonymity that the finance ministry had asked the department of industrial policy and promotion (DIPP) to review its recommendation and come out with proper guidelines defining “state-of-the-art” and “cutting-edge technology”, both qualifiers under which it had sought to waive the local sourcing condition.

And:

“There is nothing to show that Apple’s technology is cutting edge. DIPP has been asked to come out with a clear-cut guideline defining ‘cutting edge’ and ‘state-of-the-art’ technology for which such a waiver can be given. There are other companies also in the queue. It could create controversy if we waived the norms for only one without stated guidelines,” the official cited above said.

A second government official said the fact that Apple did not have a manufacturing facility in India went against it. This person also spoke on condition of anonymity.

This feels like a negotiation to me. I don’t think this is over.

Cook met Prime Minister Narendra Modi on Saturday. A statement from the Prime Minister’s Office said Cook shared Apple’s future plans for India. “He spoke of the possibilities of manufacturing and retailing in India. He appreciated the breadth of young talent in India, and said the youth have significant skills which Apple would like to tap,” the statement added.

Feels like “cutting edge” and “state of the art” are really red herrings here. I think the iPhone satisfies both. Feels like the real issue is using local talent, contributing to the local economy in a significant way. My gut is that Apple will work through this.

[H/T Bhaskar Bhat]