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This Could Kill Apple’s Plan to Conquer India

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Apple CEO Tim Cook visits Mumbai on May 18. Press Trust of India via AP

Indian officials have reportedly dealt what could be a fatal blow to Apple’s attempts to sell iPhones in the world’s fastest-growing smartphone market.

Arun Jaitley, India’s finance minister, ratified a decision to apply local sourcing rules to any potential Apple (AAPL) retail locations in the country, according to Bloomberg, which cites anonymous sources. That means Apple, which builds the bulk of its products in Chinese factories, would need to start locally producing 30% of the components in the products it sells in India in order to move forward with plans to open multiple retail locations in India.

Fortune has reached out to Apple for comment and will update this story with any response.

 

 

Earlier this month, Apple CEO Tim Cook traveled to India to unveil plans to open three Apple Stores in Delhi, Bangalore, and Mumbai within the next 18 months. Apple filed an application to open the retail locations in January, and the tech giant also lobbied the Indian government to sell refurbished iPhones at lower prices, but the latter efforts were squashed by Indian officials following objections from competitors such as Samsung and Indian smartphone maker Micromax.

Apple’s Cook has made no secret about his desire to tap the rapidly-growing market in India, where the company currently holds only about a 2% share of the smartphone market. Growing that share would help Apple balance out the decline in iPhone sales elsewhere around the world that has threatened the company’s growth and wreaked havoc on its share price. The company currently sells its iPhones, iPads, and Macs through third-party resellers in India, where the government has been pushing its “Make in India” program in an effort to force more tech companies to build their devices in the country.