Under foreign direct investment (FDI) norms, India doesn’t allow single-brand retail stores in the country unless at least 30 percent of the stores’ products are made in India. This rule is in place mainly to lower outsourcing and increase the focus on country-made products. However, according to sources, Apple proposed to a government committee, headed by Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek, that India grant the company an exception to the rule.
Interestingly enough, the committee said yes, and will send Apple’s proposal to the Finance Ministry for final approval. India’s government can grant companies an exception if they are found to make state-of-the-art and cutting-edge products, a point that the committee reportedly believes applies to Apple.
If the Finance Ministry gives final approval to Apple’s proposal for an exception to the FDI norms, it would be huge for the company and a possible nightmare for resellers. Because there aren’t any official Apple retail stores in India, the company has had to rely on resellers to get its products to consumers. Now that there’s a strong likelihood that Apple will open its own stores in the country, resellers face the prospect of losing this leverage.
India may be a relatively small market for Apple, seeing how the company shipped 1.9 million iPhones to the country in 2015, but the company sees India as a market with immense potential.
“I sort of view India as where China was seven to ten years ago from that point of view,” said Apple CEO Tim Cook during the company’s recent earnings call. “I think there’s a really great opportunity here.”
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