On Wednesday, government officials announced that India had rejected a plan of the iPhone maker concerned with the import of used iPhones in the country. This is a serious blow for Apple Inc. as it has been making a lot of effort for reviving the declining sales of its flagship smartphones in the Indian market. In some countries, which also include the United States, Apple has a policy of selling its refurbished phones at a lower price. If the company would have been able to extend this practice to India, the move could have assisted the US tech giant in increasing its share in one of the fastest growing smartphone markets in the world against rivals who are offering devices at much cheaper rates.

However, the proposal was completely rejected by the Indian government, which cited rules against importing any used electronics in the country. Currently, an initiative called ‘Make an India’ is being promoted for boosting the competitiveness of the Indian manufacturing sector and this plan would have been against it. A spokesman for the telecom ministry said that the country didn’t encourage recycling or dumping of hazardous materials. Domestic phone makers had been heavily opposed to Apple’s proposal as they said that refurbished phones were in breach of the anti-dumping rules practiced in India.

Refurbished phones are those devices that have been repaired to original factory condition after damage or have been returned by buyers. The Appliances Manufacturers Association and Consumer Electronics had asked the telecom ministry in India to put a stop to this move. Apple didn’t comment on India’s rejection of its proposal. This news comes at a time when the first-ever reduction in iPhone sales was reported by Apple due to weakness in the Chinese market, which is the most important market for the company after the United States.

As far as India is concerned, Apple’s market share is approximately 2%, but in the first three months, its sales increased by 56% because of the availability of cheaper old-generation devices like the iPhone 5S. However, there was a disappointing demand for the company’s new iPhone SE. Analysts said that the popularity of the 5S in India is mostly because of the affordability of a device of a premium brand and not because people like smaller phones. Therefore, budget buyers would not be inclined to invest in the iPhone SE, which is more expensive than the 5S.

The newly introduced iPhone SE is priced at RS 39,000 in India, which is around $585 and this is almost $200 higher than the US price. If Apple wants to take advantage of the smartphone boom in India as sales are expected to grow about 25% this year, the company will need to establish a better retail presence and also introduce cheaper versions of the iPhone. This is because the average price of a smartphone in the country is $150. While Apple is retailing in India through local partners right now, it is already seeking permission of the government to set up its own store in the country.

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