Consumer discretionary

India Requiring Manufacturing Commitment From Apple Inc. Before Approving Apple Store Construction

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The government is requiring a firm commitment from the company before it gives an approval on the launch of Apple Stores

According to a statement given by a senior government official to Bloomberg, India may loosen its policies on local sourcing for the constructions of Apple Stores in India. The requirement for this is that Apple presents a detailed time frame to the government for local manufacturing plans. 

It’s been revealed that the Finance and Commerce ministries are currently engaged in talks with the company to accommodate a launch of the company without active factories. Apple would then be granted the ability to use the partners like Foxconn. 

In order to promote the local market, India currently requires foreign firms to source a minimum of 30 percent of components locally, however Apple sources most of its components from China. Apple only has one private factory owned by the company and the rest is all outsourced to other companies. Only recently has Apple started buying chargers from India.  

But these policies aren’t absolute, as there have been exceptions granted in the past, however Finance Minister Arun Jaitley has waived that possibility by ratifying the Foreign Investment Promotion Board’s decision. 

In order to broaden its hold on the growing market of India, Apple needs to incorporate first-party Apple Stores into the country. Currently, Apple’s devices are sold in the county via resellers. Furthermore, the company has also identified that since India is a developing market, most iPhones are above the buying power of normal citizens. Most phones sold in the country cost less than $150. Due to this, only 2 percent of the Indian phone market has been captured by Apple, and the small yet growing middle class is Apple’s ray of hope.

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