Apple is attempting to open its own stores in India but is currently facing opposition from the Indian government.
Apple has asked the government to relax the local sourcing clause in its policy on foreign direct investment (FDI) in single-brand retail. Though government officials seem to have ruled this out for now, the proposal has not yet been closed.
India’s regulations on foreign investment currently state that companies must source 30% of their components from Indian companies. Apple is requesting that this restriction be relaxed so that it can set up stores legally in the country.
Apple’s argument is that iOS devices simply do not have enough hardware inside to be able to source 30% from Indian companies. Apple is also unlikely to want to change manufacturing processes for just one region.
“They (Apple) have clearly told us that they cannot adhere to the sourcing norms as they hardly use any hardware for their products. We have also told them that while the government is keen on investments, it cannot make exceptions. However, we can analyse a company’s needs on a case by case basis,” a senior government official told Business Standard.
The official added that the company was “keen to invest in India, buoyed by the demand for its products, which is rising every year”.
Apple has been trying to enter the Indian market by setting up wholly-owned retail stores since 2006. Its hope of opening its own stores across the country were renewed in January 2012 when the government allowed 100 per cent FDI in single-brand retail.
At present, Apple has a deal with 45 ‘Apple Premium Resellers’ in India that are run under the franchisee model with partners.