Thanks to the central government further liberalising Foreign Direct Investment (FDI) rules, Apple is poised to start its first online sales in the country.
This will allow Apple to start selling a range of products in India through its own online store. As of now, Apple products are sold in India through partnered third-party offline retailers and e-commerce platforms such as Amazon India, Flipkart, and Paytm Mall. Apple is yet to set up its long-awaited offline store in India.
On 28 August, the Indian government announced that it is easing the rule that forced foreign companies to source 30 percent of their products locally. Apple has been struggling to open it own store due to this rule because most of its component are manufactured in China. However, with the new rule, both materials sold in India and those exported in the local sourcing law will be counted, thus easing the requirements.
Apple iPhone XR. Image: tech2/Omkar Patne
“It has been decided that all procurements made from India by the single-brand retail trade entity for that single brand shall be counted towards local sourcing, irrespective of whether the goods procured are sold in India or exported. Further, the current cap of considering exports for five years only is proposed to be removed, to give an impetus to exports,” Piyush Goyal, Commerce and Industry Minister, said in a press conference, according to TechCrunch.
In May this year, we also learned that Apple has short-listed the locations for its first retail store in India, and it is going to be in Mumbai. In the coming weeks, Apple will apparently be revealing the final location for its first store. However, this store will not be ready before the year 2020.
Apple has been working on opening its own stores in India for a few years now, however, it could not get approvals because it doesn’t meet local sourcing requirements. Apple applied for the same in 2016, but the proposal was never cleared as the government mandates that companies opting for over 51 percent foreign investment must get nearly a third of their products manufactured locally.
Apple recently turned things around when it announced in April this year that it will start mass production of iPhones in India with the help of Foxconn. Earlier, a large amount of iPhone production took place in China, but Apple now seems to be making a big shift towards the Indian market. And since this also fulfills the local sourcing requirement, we will soon have five new official Apple Stores in India.
Apple already has Wistron producing older iPhone models in Bengaluru, and the manufacturer recently started making the iPhone 7 locally. With Foxconn, Apple plans to expand manufacturing to produce newer iPhone models.
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