Two weeks after Indian Prime Minister Narendra Modi paid a visit to Silicon Valley, where he met with industry leaders to include Apple CEO Tim Cook, an agreement has finally been struck for the ‘Apple Store’ to debut in India. However, as many global retailers have already discovered to their chagrin, there is frequently a catch when it comes to doing business in India. In Apple’s case, it will be that Croma, a local electronics retailer and part of the Tata Group’s business empire, will actually be running the stores. The Indian government maintains onerous local sourcing requirements for single brand retailers. Consequently Apple has kept its Indian market entry strategy on the back burner for many years now.
The government’s regulation requires 30% of a product’s components to be sourced from small Indian businesses and artisans, which many global companies claim is both financially and logistically prohibitive. Foreign retailers including IKEA, Zara, The Gap, and Apple have all reportedly lobbied for the provisions to be diluted – with little success.
India is home to 14 percent of the world’s population, but it accounts for less than one percent of Apple’s US$ 183 billion in sales. In a country of over one billion inhabitants, the tech giant sold only 1.7 million iPhones in India between October 2014 and September 2015. The company intends to open six locations in Bengaluru and Mumbai as a first step in boosting sales. But plenty of competition already exists – over 4,000 unofficial resellers and e-commerce portals are already selling Apple products in India.
Photo Credit: http://www.timeslive.co.za/
