Apple is reportedly planning to set up retail stores in India to expand its presence in the country, provided the national government eases the single-brand retail FDI rules.
Apple is attempting to initiate a direct connection with Indian smartphone market by setting up its own retail store, but current FDI rules oppose the Cupertino tech giant's decision, a report from Business Standard claims. For its part, Apple is trying to convince the national government to ease the current FDI policy that requires companies to source 30 percent of its components from Indian companies.
According to a report from Business Standard, Apple's senior executives met with country's Department of Industrial Policy and Promotion (DIPP) officials to discuss the matter. Following the meet, a DIPP official discussed Apple's refusal to accept the norms set up by the government before setting up a single-brand retail store.
"They (Apple) have clearly told us that they cannot adhere to the sourcing norms as they hardly use any hardware for their products," a senior DIPP official told Business Standard. "We have also told them that while the government is keen on investments, it cannot make exceptions. However, we can analyze a company's needs on a case by case basis."
Apple argues that iOS devices lack sufficient hardware so 30 percent of it can be sourced from India's micro, small and medium enterprises. The tech giant, which has close ties with China's Foxconn Technology Group for the manufacturing of its iPhones, iPads, iPods, is also unlikely to change its manufacturing process simply to adhere to rules in one region.
Apple's interest in the Indian market was seen in many reports. In January this year, an ET report said that Apple is bringing back the iPhone 4, 8GB to India, after losing significant sales and market share to rival Samsung. Another report in October revealed Apple's plans to open as many as 100 standalone stores in India.
If the DIPP considers an exception, chances are that Apple will get lucky to set up a retail outlet in India. The iPhone maker will no longer have to rely on resellers like Reliance Digital and distributors like Redington India to push its inventory. Currently, Apple has a partnership with 45 premium resellers in India.
