Indian Government Set to Officially Adopt Rules Allowing First Apple Retail Stores

Wednesday July 20, 2016 8:20 AM PDT by Mitchel Broussard
Indian Prime Minister Narendra Modi is expected to finally approve a three-year extension on local-sourcing rules within the country, granted to Apple due to its single-brand retail company status selling "cutting-edge technology." Those familiar with the matter, speaking with Bloomberg, claimed that the Indian government as a whole is gearing up to make it easier for all companies like Apple to meet a similar criteria.

Apple-Retail
Before the so-called "shift" in Modi's government, India's rules on foreign direct investments required 30 percent of goods sold by a foreign company to be manufactured and produced within the country. Like most companies, the law prevented Apple's retail growth within India -- leading to a handful of third-party endorsed pop-up shops -- because of the fact that most of its goods are created in China.

Apple filed for a new retail application when the new shifts in India's laws began to pick up steam, but some confusion still remained over what would be considered "cutting-edge" and "state of the art" technology, which could eventually grant a company another 5-year extension on top of the blanketed 3-year ruling being made common. It's this "push to clarify" the country's laws and procedures that Modi is spearheading, eventually expected to allow Apple to open its first retail stores in India.
Modi’s push to clarify those procedures will pave the way for Apple to open a retail store, according to the people [familiar with the matter]. The new rules may also impact China’s Xiaomi Corp. and Leshi Internet Information & Technology Corp., which have also asked for exemptions.
Apple has been attempting to gain a foothold in India for a while now, most recently with CEO Tim Cook visiting the country, and Modi himself, to discuss manufacturing and retail opportunities. Its Authorized Mobility Resellers program has allowed Apple to skirt the country's restrictive retail presence rules, but still lacks the ability to bring in big sales numbers from India.

Tag: India
24 comments


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Bubba Satori
37 months ago
Gotta give Tim credit for getting this done.
Big win for Apple and India, the world's biggest democracy.
i hope the world's biggest dictatorship takes note.
Rating: 4 Votes
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Relentless Power
37 months ago

:eek:Goodness that escalated in a hurry. :confused:

Um, actually from talking to a forum member here several months ago who had issues with several iPhones in succession but no easy recourse because his only option at the time was to deal through a reseller, this IS a good thing for consumers in India who want iPhones.

The average income in India may be low but they've got a huge population and in that huge population is an affluent segment who can afford pretty much anything affluent people in the west can afford. Also there are a LOT of Indians who live most of the time in the west, but take incredible amounts of pride in India and are very much in touch with family back in India and often go back for visits and extended stays. A good friend of mine fits this description. The tastes they acquire here and the products they use here are thus spread to friends and family back in India, so the demand can come from that exposure alone.

I know I am always gratified as a consumer to know if I buy a product from a foreign manufacturer, that I can enjoy the same level of access and service as the customers in the manufacturers home country. I would imagine Indian consumers would feel the same way.

I doubt their poor are going to be selling kidneys to get an iPhone. It's a different culture, with different values and besides, there are already iPhones over there and have been for a long time, through resellers. As well as many other more desirable products.



Excellent representation of what I Was attempting to explain to another forum member previously. You nailed this post. Thank you.
Rating: 2 Votes
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kdarling
37 months ago

Before the so-called "shift" in Modi's government, India's rules on foreign direct investments required 30 percent of goods sold by a foreign company to be manufactured and produced within the country.


Although under even the old rules, they had five years to comply with the 30%.

Apple filed for a new retail application when the new shifts in India's laws began to pick up steam, but some confusion still remained over what would be considered "cutting-edge" and "state of the art" technology, which could eventually grant a company another 5-year extension on top of the blanketed 3-year ruling being made common.


The rule is purposely vague, but basically, "cutting edge" just means "cannot be sourced in India."

I suspect the original Indian ruling that Apple's products were not "cutting edge" was simply an attempt to get Apple to build an assembly plant in India, like the Foxconn factory already in China.

This extension of not having to comply with the 30% rule right away, is pretty useless unless Apple knows for sure that they'll get declared as high tech enough to get a further waiver within a few years. Otherwise, it seems like a trap designed to lure companies into opening stores.

Has Apple been granted "cutting edge" status? I don't see any news that says so, but would love a reference that does.
Rating: 2 Votes
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GrumpyMom
37 months ago
:eek:Goodness that escalated in a hurry. :confused:

Um, actually from talking to a forum member here several months ago who had issues with several iPhones in succession but no easy recourse because his only option at the time was to deal through a reseller, this IS a good thing for consumers in India who want iPhones.

The average income in India may be low but they've got a huge population and in that huge population is an affluent segment who can afford pretty much anything affluent people in the west can afford. Also there are a LOT of Indians who live most of the time in the west, but take incredible amounts of pride in India and are very much in touch with family back in India and often go back for visits and extended stays. A good friend of mine fits this description. The tastes they acquire here and the products they use here are thus spread to friends and family back in India, so the demand can come from that exposure alone.

I know I am always gratified as a consumer to know if I buy a product from a foreign manufacturer, that I can enjoy the same level of access and service as the customers in the manufacturers home country. I would imagine Indian consumers would feel the same way.

I doubt their poor are going to be selling kidneys to get an iPhone. It's a different culture, with different values and besides, there are already iPhones over there and have been for a long time, through resellers. As well as many other more desirable products.
Rating: 2 Votes
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Avieshek
37 months ago
The relation between Spinning hard-drives and "Cutting Edge Technology" might be spinning heads than.
Rating: 2 Votes
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SteveJobs2.0
37 months ago

Biggest democracy. Might as well say slowest democracy.


Efficiency and agility are not the strong points of any democracy, let alone a large and developing one.
Rating: 1 Votes
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MH01
37 months ago
Great news for Indian Apple fans!!! Hope it's the first of many !
Rating: 1 Votes
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GrumpyMom
37 months ago

The problem here is the rich population will have iPhones, sure. The rest will want them. That is where the issues will rest. Only time will tell. If Apple goes to India it would also be in their best interest to have some affordable products that best reflect the general population.

In terms of resellers. Allowing Apple to setup resellers and certified Apple service centers would be much better for the country. Let the Indian people own shops and get parts and training from the US. If we remember, Apple used to do that here, and it worked until Apple got greedy and put stores of every corner.

We have very poor people here who want iPhones too but can't afford them. They buy other cheap phones instead. I should know, I was one of them in my youth--though it wasn't premium cell phones I had to do without since they weren't around, but other things.

Anyway in India they DO have phones available for people who can't afford iPhones. http://gadgets.ndtv.com/mobiles/news/jivi-launches-cheapest-android-based-smartphone-in-india-at-rs-1999-594264?site=classic

http://www.telegraph.co.uk/technology/mobile-phones/10995383/Should-the-26-Indian-smartphone-worry-Apple.html

I'm not saying your suggestions should not be implemented. I am just saying there's nothing wrong with India getting Apple stores like we have everywhere else. And they will still have their current resellers too, I would imagine. Of course I'm open to discussion as to why you feel this will be a bad thing for their people.

But either way, in the end it's up to them what they negotiate out of Apple. They are a proud up and coming nation and I know my friends would resent India being seen as a third world hole or treated patronizingly. Their people are working hard to address poverty and social injustice just as we have and continue to do here.
Rating: 1 Votes
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Relentless Power
37 months ago

:confused: Really? The privilege to pay more than a months salary for a phone is worthy of congratulations?? You really think this is going to help their society. Good thing they have this great device that will totally make them worthy to the rest of the world.

Average US Household Income: $3,263
Average Indian Household Income: $302
iPhone Cost: $400-$1000 off contract

Ya. CONGRATULATIONS INDIA!!! :rolleyes:



What are you trying to prove here? I made a simple respectable comment acknowledging India's commerce and more or less, advocating Tim Cook's visit back in June. I am happy for India and Hopeful for them in the future with future business relations.

Your comment came off disrespectful and provided very little contribution to the REAL support India deserves. So, I say once more. Congrats India. You deserve it.
Rating: 1 Votes
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kdarling
37 months ago

...They don't want Apple Stores unless Apple makes things or sets up shop there. Apple Stores don't exactly help the Indian economy. The money leaves the country and goes to the US (or rots in Ireland). India wants things to be made there to keep jobs there and keep the money from leaving the economy. It is SMART!


Yes, India government sources have said that no new jobs would be created; that people who used to work on their own or for a small merchant would simply move to working at the bigger store instead.

Indeed, the entire purpose of the 30% rule was to prevent the equivalent of a Walmart coming in and destroying all the local stores, which happens so often in the rest of the world.

Not to mention that India has a history of being treated as a colony, and really wants to make its own way if it can.

The best thing for India would be for them to have an iPhone competitor developed on their soil. They have enough talent to make it happen.


There's already several major India phone makers, producing nice items for a much more affordable price.

Karbonn and Micromax come to mind.
Rating: 1 Votes
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