Rejoice Apple fans in India, because the chances of Apple stores popping up all over the country have gotten a whole lot better. Yes, we know that the launch of Apple stores in India has been a long overdue, but better late than never, right?
Tim Cook and team have had plans for expansion and establishing a brand presence in India for quite some time now. But, sadly the company has been running into some unexpected snags such as the resignation of Sanjay Kaul, Apple’s ex-head of operations in India and other regulatory troubles. Thanks to the recent cabinet ruling, few of these troubles have been put to rest.
The cabinet on Wednesday decided that Apple and other foreign manufacturers will no longer have to seek permission from the government for more than 49 percent FDI in single-brand retail. Earlier brands like Xiaomi had to resort to collaborating with local partners for setting up their MI Home stores. But due to the cabinet’s recent ruling, foreign companies will no longer have to resort to such makeshift solutions.
This decision is expected to impact various sectors, but brands like Apple, which are not allowed to open their retail stores in the country will benefit the most. Now that the verdict has been passed, Apple may soon be retailing out of self-branded stores in India with a few ‘Terms and Conditions applied’ of course.
For starters, all the companies is supposed to follow the 30-percent-domestic-sourcing norm. And while this could have been a roadblock for the iPhone maker, but since the company is now manufacturing iPhone SE in India, I guess that worked out quite well for Apple.
The cabinet, feeling a little generous maybe, decided to make it easy for foreign companies to enter retail in India. As a result of which, they decided to permit foreign retailers to set up stores in the country to set off the goods sourced incrementally from India for their global operations during the initial five years against the mandatory sourcing requirement of 30 percent of purchases from India.
Tarun Pathak, Associate Director at Counterpoint Research, said that”It [100 percent FDI] can open stores and drive the overall experience for Apple’s products, but the only thing that can stand in the way of growth in manufacturing. Apple can open stores, but unless and until they start manufacturing in India, the price of the products will remain high. If you can’t control the pricing, that will be a big worry area.”
It seems like the government has finally decided to “remove roadblocks” to foreign investments in hopes that the relaxation of norms would facilitate the faster development of India’s economy. I, for one, am always in favour of removing all the roadblocks, especially if it gets me a cheaper iPhone!