Apple may still get to set up wholly-owned stores in India, with the country’s Commerce Ministry promising to discuss the matter with the Finance Ministry that had objected to the proposal.
Indian government rules require that foreign-owned, single-brand retailers source 30 percent of their products locally, but the Indian government had indicated that it could provide a waiver of that requirement for branded stores of retailers of high-tech products. Apple had hoped for such an exemption from the government.
On Monday, Commerce and Industry Minister Nirmala Sitharaman said that her ministry did not oppose providing a waiver to high-tech companies like Apple and would discuss the matter with the Finance Ministry.
Why this matters: Apple has decided to focus on India, where it saw 56 percent year-on-year growth in iPhone sales in the last quarter. Its revenue from China, its second largest market, fell 11 percent in the same period.
To build its share in the Indian market, the company was hoping to sell low-cost refurbished phones in India. But that move came in for criticism from the environment ministry, which is concerned that this could create a recycling problem, as the phones would be closer to end of life. Some of Apple’s rivals also opposed the proposal.
Sitharaman said her ministry was not in favor of Apple's plans for the import of refurbished phones.
India’s focus is to persuade mobile phone makers to make the devices in the country and it has been quite successful so far. Apple has not announced any plans to make its phones in India. But during a meeting this month between Apple CEO Tim Cook and Indian Prime Minister Narendra Modi in Delhi, the executive spoke of the “possibilities of manufacturing and retailing in India,” according to the country’s Press Information Bureau.