Apple fans in India may be in for some disappointment. The iPhone and Mac computer maker’s plans to set up its own retail stores — the iconic Apple Store — has hit a roadblock, according to a Bloomberg report.
Ironically, this comes right after Apple CEO Tim Cook’s celebrated visit to India where he also met Prime Minister Narendra Modi.
FactorDaily had reported about Apple’s plans to open its stores in Delhi, Bangalore and Mumbai within the the next 18 months earlier this month.
The Foreign Investment Promotion Board (FIPB) has ruled that Apple must comply with local sourcing rules to sell products through its own retail stores, Bloomberg reported on Tuesday citing sources.
The government, however, is yet to issue an official statement. Usually, results of such deliberations are put up on the FIPB’s website.
In India, foreign single-brand retailers need to meet the 30% domestic sourcing norms. That means at least one-third of a product must be made or sourced in India. A loophole that might work in Apple’s favour is that if a company is able to prove that it uses cutting-edge technology, the sourcing norm can be relaxed, according to a Mint report from February.
An Apple spokesperson declined to comment on the issue. According to news reports in May, the government rejected Apple’s application to sell refurbished or pre-owned certified phones in India. Apple had also put in a request to set up retail stores in the country in December last year, as per reports.
Differentiated by its trademark airy and bright design, products intuitively placed on wooden desks, and well-trained staff, the Apple Store is considered the gold standard in the US both for user experience and sales per outlet.
Unlike in other industries or even among Apple’s competitors, Apple Store staff have fixed salaries and are not compensated by sales commissions.
Apple in India has a market share of 3.4% and occupies the seventh position in the pecking order of smartphone sales in the country, according to research firm CMR.