It has been nearly two years now since Apple Inc’s chief executive officer, Tim Cook, visited India. Since then, loyal fans of the brand have been waiting eagerly for the day when Apple opens its flagship store in India.
Many in the industry believed the U.S. tech giant was a step closer to setting up its own store in India when the cabinet relaxed foreign direct investment norms for single brand retail traders on Wednesday. Under the new rules, single brand retailers are now allowed to invest in India without seeking government approval and they also have five years from the date of opening of their first store to meet the mandatory 30% domestic sourcing requirement.
However, Indian iPhone fans might still have to wait a while before they can shop at an Apple store in the country. Industry experts say the tweaked rules will not necessarily help Apple in India because a majority of smartphone components are sourced from South Korea and China.
“The relaxation won’t have Apple executives scurrying to find a location for its flagship stores as after five years the company would still have to meet the domestic sourcing requirements,” says Arvind Singhal, chairman and managing director of Technopak, a consultancy firm specialising in retail.
“I view today’s announcement almost as a non-event. First and foremost, single brand retail is a term peculiar to India. Secondly, the likes of Zara, H&M, Marks & Spencer, Ikea, and others are already in India.”
After Cook’s visit, Apple has been in constant dialogue with various Indian government departments to find a way to enter the country with its wholly-owned flagship stores. So far, the obvious hurdle preventing the iPhone maker from opening stores in India was that 100% foreign direct investment in single brand retail trade made it mandatory for foreign companies to source 30% of their raw material from India.
Singhal’s views are echoed by others who track the retail industry. “Today’s announcement is more for the optics. There are very few large single brand retailers who are waiting to invest in India,” says a consultant at a global audit and consultancy firm who did not want to be identified. “All the luxury brands already are present here by way of franchising.”