Tim Cook’s India visit a success after all; new FDI norms open doors to Apple Stores

Tim Cook was in India recently and started his trip with lord Ganesha’s blessings to probably elevate the falling sales by setting the ball rolling in India. Looks like, finally, there is some good news for him and Apple fans in India. The government’s decision to relax FDI norms includes single-brand retail trading. This means, the Cupertino-based company can now open its stores in India.

After norms relaxed (30 percent) in November 2015, Apple had applied for exemption on the ground that it was introducing “state-of-the-art” and “cutting-edge technology” to the country.

However, the DIPP found that there was “nothing to show that Apple’s technology is cutting edge” revealing that Apple may have once again hit a roadblock when it comes to opening its Apple Stores in India. Apple also put forth a presentation to the industrial policy and promotion secretary Ramesh Abhishek where the Cupertino tech giant pressed for the special provision. The same indicating that Apple really fits the case, because there was very little that the company could source from the country that is limited to some chargers that are currently being exported to markets like China.

Interestingly, the norms have now been relaxed for products said to come with ‘state-of-the-art’ and ‘cutting edge’ technology. The new norm will allow single-brand retail trading and exemption from local sourcing norms for ‘state-of-the-art’ and ‘cutting edge’ technology with a waiver for three years, and the option to extend it for five years. This means Apple Stores could be set up just in a matter of time. This will also benefit others such as furniture company IKEA. This also means paving in way to Chinese vendors like Xiaomi and LeEco.

Centre has radically liberalized the FDI regime, with the objective of providing major impetus to employment and job creation in India.

— PMO India (@PMOIndia) June 20, 2016

“We will inform Apple to indicate whether they would like to avail new provisions,” Ramesh Abhishek, Secretary of Department of Industrial Policy and Promotion said.

Tim Cook’s visit, may have been no surprise, and actually a well planned one. It came right after the whole refurbished conundrum. In India, Cook announced a startup incubator in Bengaluru, and a new development centre in Hyderabad and there are also reports about local manufacturing in partnership with Foxconn. All the development will be a push to Modi’s ‘Make in India’ initiative, but Cook will want his share of bargain. And, looks like, he has got it.

Apple has big money bags, so investing into development, research, manufacturing and so on, wouldn’t be a daunting task. While Apple could get its numbers going, the Indian government could actually manage to get a good share of bargain its ‘Make in India’ initiative. For Apple customers though, this will be a win-win situation.

With the major roadblock gone, we may now see some news about Apple stores trickling in. It is already reported that the company is planning for 2000 – 3000 sq feet stores in India. With dipping sales globally and a slowing China market, Apple can no longer ignore the Indian market. The idea of stores is to drive larger audience to experience its premium devices. Though the focus may not be sales yet, it will eventually boil down to introduce its products and eventually convert these into potential buyers.

The new norms also come to some other sectors, in all nine sectors, such as 74 percent FDI allowed in pharma sector that will allow foreign investors to invest up to 74 percent in its existing domestic companies without the need for government’s approval. The norm will also allow 100 percent FDI in scheduled airlines. In defence sector, foreign companies can own 100 percent equity.

So, where do you think Apple will open its first store in India?