Apple Inc. (NASDAQ:AAPL) is on the path towards receiving a clearance from the government of India to open its first retail store in the country, according to Bloomberg based on information from a person knowledgeable about the situation.
During a recent town hall meeting with Apple executives, CEO Tim Cook stated that the iPhone maker was in the early stages of its application to open a retail store in India.
The source told Bloomberg that the iPhone maker is resubmitting its application to the Indian government because the format was incorrect. The person added that the government is planning to issue a clearance for the company, but the timeline for the approval is still unknown.
In October last year, it was reported that Apple partnered with Croma, a consumer electronics retailer, to establish retail stores in India. Croma is operated by Infiniti Retail, wholly owned subsidiary of Tata Group.
Croma agreed to provide 400 to 500 square feet for Apple stores in Malad, Juhu, Oberoi Mall, Phoenix Mall, and Ghatkopar in Mumbai and Bengaluru, Jayanagas.
Infiniti Retail CEO Avijit Mitra previously stated that the Apple Srore in India would be modeled on the company’s global design.
Apple may be exempted from India’s local sourcing regulation
India’s local sourcing regulation that mandates single-brand foreign investment in retail was considered a challenge for Apple. However, the source indicated that the iPhone maker should qualify as a provider of cutting-edge technology, which would exempt it from the regulation.
Indian Prime Minister Narendra Modi invited Apple to establish a manufacturing base in his country during his meeting with Cook last year. Cook’s response was positive and indicated that he was interested in a “whole app development economy.”
Apple is seeking growth opportunities in Asia
Apple is seeking other growth opportunities in Asia, and India is one of them given its population of 1.3 billion people. Cook believes that the country is “one of the most important growth areas for the next decade.”
During Apple’s earnings call, Cook reported that the company’s revenue in India increased 38% to $1 billion for the December quarter.
“India is incredibly exciting. India’s growth, as you know, is very good. It’s quickly becoming the fastest growing BRIC country. It’s the third largest smartphone market in the world, behind China and the United States,” said Cook.
Tarun Pathak, a senior analyst at Counterpoint Technology Market Research in New Delhi, commented, “Most of the growth in India will come from new users coming into the Apple ecosystem, unlike in the West where growth is mainly from existing users upgrading. You can expect the stores to focus mostly on iPhones.”
Patak added that Apple is likely to continue its discount policy on older iPhone models to attract more new users. The analyst believed that the company has more room to grow in the country.
Bloomberg noted that the iPhone maker only account 2% of the smartphone market share in India as majority of consumers prefer cheaper devices. There are approximately 220 million smartphone users in India.