New Indian ruling appears to finally give Apple go-ahead to open retail stores
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Amended foreign investment rules clear the way for Apple India stores, and the possibility for the US technology giant to start manufacturing there.
Under the new rules, foreign retailers are exempted for three years from a requirement to locally source 30 per cent of the goods sold in company-owned stores.
This means Apple, which now sells its hardware through resellers and first applied for store licences in January, can set up its own shops in India, the world’s fastest-growing major smartphone market with sales expected to rise more than 25 per cent this year.
Apple, which has a less than 2 per cent share in India’s smartphone market, can resubmit its application for store licences.
India has been lobbying Apple and its partner Foxconn to start manufacturing in India as part of Prime Minister Narendra Modi’s agenda to bring in foreign manufacturers to create millions of jobs. The rule-change announcement comes a month after Apple boss Tim Cook met Modi to discuss the company’s plans for retail and manufacturing in India.
Meanwhile, India’s new look at retail rules may also help with expansion for Swedish furniture-retailer Ikea, which is setting up stores in Hyderabad and Mumbai.
Questions & Answers
Q.What specific rule change allows Apple to now open its own stores in India?
What specific rule change allows Apple to now open its own stores in India?
Foreign retailers are now exempt for three years from a rule that required them to locally source 30 per cent of goods sold in their company-owned stores. This exemption clears the path for Apple to establish its retail presence directly.
Q.What is the expected growth rate for smartphone sales in India this year?
What is the expected growth rate for smartphone sales in India this year?
India is considered the world's fastest-growing major smartphone market. Sales in the country are expected to rise by more than 25 per cent this year, indicating significant potential for companies like Apple.
Q.Did any high-level discussions precede the announcement of these new rules?
Did any high-level discussions precede the announcement of these new rules?
Yes, Apple boss Tim Cook met with Prime Minister Narendra Modi a month before the rule change announcement. They discussed Apple's plans for both retail operations and manufacturing investments in India.
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