After one of Apple's most concentrated business trips to India, Bloomberg reports that "India's Foreign Investment Promotion Board ruled Apple must comply with regulations to procure 30 percent of components locally if it wants to sell through its own retail stores. The company makes most of its products in China and doesn't currently meet that criteria. While India can provide waivers for cutting-edge technology companies, the panel decided it can't certify Apple for that exception, the people said, asking not to be identified as the decision isn't public. The FIPB decision needs to be ratified by the government and it could still be overruled."
Of course that could all change very quickly should Foxconn finally sign a deal for an iPhone plant in India as has been reported. Should that come to pass, the Indian Board would have no cause to hold back providing Apple with a license to build Apple Stores.
For now, however, Apple is being denied the green light to proceed. That was somewhat obvious over the weekend when Prime Minister Modi made no announcements regarding this matter, which many were hoping to hear to end Apple's business trip on a high note. Yet Apple expanding into India with a series of flagship Apple Stores isn't a matter of if but rather when.
Vishal Tripathi, research director at Gartner told Reuters that "The trip was more about understanding the Indian market, but was also about signaling to the world that Apple has arrived in India." There's more news from Reuters on Apple's business trip in a report titled "More challenges than cheer for Apple chief on Asia tour."
In the end, it comes down to Prime Minister Modi's "Make in India" initiative. Whenever Apple announces along with Foxconn that iPhones will be manufactured in India, the Indian PM will most certainly ensure that Apple gets fast tracked for its stores.
Yet it's a little disappointing considering that Apple will be opening a new Maps development office hiring 4,000 Indians. For some reason the government seems to be mentally stuck on iPhones having to be manufactured in India before Apple Stores are allowed in.
In all fairness, the Indian government should give Apple the green light on a limited number of Apple Store licenses to show good faith for the first moves Apple has made to this point. The fact that that the Indian Government wants to play hardball and only by its rules, is likely why large multinationals are reluctant to enter their country.