Will Apple be allowed to sell used iPhones in India?

Don’t turn “Make in India into Dump in India”. The message is loud and clear from industry executives who are warning the government against giving permission to Apple to sell used iPhones in the country. The iPhone maker is seeking permission to become the first company allowed to import and sell used phones into the country, its second attempt in as many years.

Last year Apple attempted to get the Indian government to lift its ban on the sale of imported, refurbished phones but the environment ministry rejected the request without much consideration. Since then Apple has applied to open its first retail store in the country, slashed the price of its flagship iPhone 6s and talked up its prospects of increasing sales in the world’s second-biggest smartphone market.

Sensing the threat, the electronics manufacturing industry's main representative body recently set up a lobbying arm that wrote directly to the government opposing Apple's application. "Why even consider allowing import of used phones when import of other used goods such as cars are precluded by 300% duty levies?" asked RavinderZutshi, chairman of the newly formed Mobile and Communications Council, which issued the letter. The group's members include the largest Indian phone brands: Micromax, Intex and Samsung.

According to the council,if Apple's request is permitted, it would not only open the floodgates to electronic waste but also jeopardize local players.

Selling cheaper refurbished devices can help get price-sensitive consumers, who previously would have had to save over a month's earnings or more to own the coveted brand. Apple last month unveiled a smaller iPhone SE that, with a starting price of $399, may still be out of reach of many Indian buyers. Apple now has less than 2% of an Indian market in which many phones cost less than $150.

Still, its sales there jumped 76% in the holiday quarter, indicating that demand for the premium brand is growing. Tim Cook called out the country's "incredibly exciting" prospects during his last earnings conference and said his company will devote more energy to that market.

According to Neil Shah, research director for devices and ecosystems at Counterpoint Research, "All this will neatly tie into Apple's strategy as the smartphone market peaks in the country in the next few years. Apple will sell these at far lower price points and bring down entry barriers in India where new iPhones are out of reach of the masses." Apple could target annual iPhone sales of 10 million by 2017, he added.