Apple Blocked by the Indian Government to Open Apple Stores
Yesterday we reported that Apple and Samsung had met to fight India's out of control online megastore price slashing." Last night we learned that one of the ways that Apple wants to beat online price slashers is to have an Apple presence in India via their own line of Apple Stores. While Apple works with a number of large distributors in India today, they're asking the Indian Government to relax their rules that are currently blocking them from opening their own branded stores as they have around the globe.
According to a new Indian report published by the Business Standard in New Delhi, Apple has asked the Indian government "to relax the local sourcing clause in its policy on foreign direct investment (FDI) in single-brand retail. Though government officials seem to have ruled this out for now, the proposal has not yet been closed."
The company's senior management executives recently met officials in the Department of Industrial Policy and Promotion (DIPP), which governs the country's FDI policy, and sought an exception to be made for the technology giant.
A senior DIPP official told Business Standard that Apple has "clearly told us that they cannot adhere to the sourcing norms as they hardly use any hardware for their products. We have also told them that while the government is keen on investments, it cannot make exceptions. However, we can analyse a company's needs on a case by case basis."
The official added that the company was "keen to invest in India, buoyed by the demand for its products, which is rising every year. DIPP is internally examining what methodology it can work out in this case, where a firm keen to invest in India does minimal sourcing.
At present, Apple works with 45 Apple Premium Resellers in India that are run under the franchisee model with partners. Currently, Apple consumers in India face difficulties in after-sales service. As a result of this, the company's market share remains a low two-three per cent.
One of the best ways of beating price slashing from online stores in India is to give the Indian consumer a richer Apple Store experience that could provide training and a positive community environment. India is one of the only major countries in the world that are backward in their business policies in not allowing international retailers to operate their own stores.
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