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Apple receives conditional approval to open retail stores in India

RBR Staff Writer Published 25 May 2016

Apple has received an approval from India’s Foreign Investment and Promotion Board’s (FIPB) to open retail outlets in the country on condition that it must comply with the 30% local sourcing rules.

Apple store approval

The approval comes a week after Apple CEO Tim Cook's first visit to India to make use of the opportunities provided by the country for the company's growth amidst slowing sales in China, which is the company's biggest international market, reported Hindustan Times.

Apple had sought the waiver of sourcing norms to open outlets. Its proposal is widely speculated to get the government's acceptance.

According to the country's foreign direct investment (FDI) rules, a Department of Industrial Policy and Promotion (DIPP) secretary-led panel first approves a company's application before sending it to the FIPB for a formal clearance.

Earlier reports stated that the DIPP had given its nod to Apple's proposal to open retail stores in India without the 30% local sourcing criteria, reported the publication.

As per the norms, the Indian government can relax the mandatory local sourcing norms for companies which take up single-brand retailing of products and use advanced technology.

Sources familiar with the matter were quoted by the publication as saying: "Apple's case for waiver of sourcing norms came to the finance ministry six days back, but was not justifiable.

"They (Apple) could not prove through enough merit that the technology they want to sell is cutting-edge technology and state of the art. But they can open stores if they meet the norms."

The Indian finance ministry has also asked DIPP to formulate a policy that explains cutting edge and state-of-the-art technology.

The move is the second jolt to Apple after its application to import refurbished phones was rejected by the Directorate General of Foreign Trade.

Image: Apple gains approval for opening retail stores in India. Photo: Courtesy of Thomas van de Weerd from Utrecht, The Netherlands/Wikipedia.