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Importing used iPhones may lead to e-waste

Posted: 29 Mar 2016     Print Version  Bookmark and Share

Keywords:iPhone  mobile phone  Make in India  second hand 

Local manufacturers of mobile phones in India are stiffly opposing a move by Apple to bring into the country certified second hand iPhones, saying the move would only encourage the entry of other second hand electronic items.

Experts said government approval for the move by Apple will defeat its "Make in India" campaign, and may open the field to the importation of other second hand mobile phone brands, laptops and desktop computers.

"When the government is creating Make in India to reduce imports, and a lot of mobile manufacturers are coming to the country, how can we have imports of refurbished phones by any brand, not just Apple," questioned Ravinder Zutshi, chairman of Mobile and Communications Council. The council falls under the Consumer Electronics and Appliances Manufacturers Association (CEAMA), which represents electronic manufacturers in India.

"We fully oppose such a move," he added.

The Narendra Modi-led government, which has taken decisive steps to spur local manufacturing since it assumed office in May 2014, by raising the cost of importing handsets and peripherals, faces a tight rope walk given its vocal claims to support plans by Apple, a huge global brand, to deepen its presence in India. But it also can't be seen undermining its own ambitious Make in India initiative.

Executives at two top Indian handset makers, who are investing to expand their production, also opposed allowing the sale of imported certified second hand phones, saying it would defeat the initiatives to boost local manufacturing. They didn't want to be named.

Repair or refurbished?

The Indian Cellular Association, which represents mobile phone makers in the country, backed exports of refurbished phones from the country, irrespective of the brand, but was silent on import and local sale of such phones.

"Repair and refurbishing chain can create a great employment opportunity here," said Pankaj Mohindroo, president at ICA.

Cupertino-based Apple has sought permission from the government to import second hand iPhones for sale in India, a country where its sales are doubling on-year and where it plans to also bring its iconic retail stores. The ministry of environment and forests is yet to take a decision on Apple's request, having turned it down once before last year.

Industry experts point out that a major concern would be the import of scrap items under the garb of refurbished items, which may have ecological implications. This means the government would need to clearly define "refurbished". Currently, it refers to reselling returned phones due to technical faults or incorrect delivery.

"India has strong anti-dumping laws, so they (government) would be careful not to let a Pandora's Box open up...It won't be an easy decision to make because it goes against Make in India," said Hitendra Chaturvedi, founder of GreenDust, a refurbished goods retailer.

India typically is a prolific levier of anti-dumping duty, imposed on imports priced lower than the local market price, which hits the local manufacturers.

Eager to work with Apple

But refurbishers such as GreenDust, OverCart, Surpluss and Togofogo are keen to work with the iconic smartphone maker to import and sell second hand iPhones for they offer better margins.

The industry for refurbished phones in India is about $3 billion, growing at 30% a year. Since refurbished iPhones are high in demand and short in supply, it makes a strong case for Apple to directly sell second hand phones in India, where it enjoys massive brand recall and has a high aspirational value among consumers.

The high premium attached to iPhones also makes a case for refurbishers to either partner with the brand for selling second hand phones, or source them on their own from original design makers in China and sell them at lesser price than Apple, and still make profits.

"The price benchmark (for distributor) for Apple is fairly consistent when compared to other brands, which means more margins and better money, so it makes sense to sell second hand iPhones, even if it is ageing inventory," said Saurabh Rai, CEO of Delhi-based Rai is already talking to suppliers in the U.S. and Dubai.

Alex Souter, founder of OvertCart, said the only condition would be that the phones come with manufacturer warranty.

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