Apple Urges The Indian Government To Amend Existing FDI Policy

Apple Inc. has officially requested the Indian Government to amend the existent FDI Policy so that it can setup its own Stores at prominent locations in the country.

The maker of iconic and immensely popular iPhones and iPads has approached the Central Government and urged it to relax a critical component of the Foreign Direct Investment (FDI) Policy for Single–Brand retail. The company is very keen to establish its trademark Apple Stores and this piece of legislature is the only thing that is preventing the company from doing so.

What does Apple want amended? With the latest amendments, Indian Government has thrown open the FDI in Single Brand. Meaning, any company that offers products under a single mother brand can invest within the Indian Marketplace. Moreover, the liberalization is complete; in the sense that 100% FDI is permitted! This is a bonanza for companies like iKea, Nike, Adidas and others who sell a variety of products, but under the single brand and hence companies like Wal-Mart, BestBuy and others have still not set a direct foot within India.

The piece of legislature that is proving a pain–point for Apple is that the Government mandates the investors to source at least 30% of its contents or components from within India to give a boost to the country’s micro, small and medium enterprises.

Apple is trying to circumvent the policy by stating that its iPhones and iPads don’t have much hardware contents and its laptops are assembled products. Hence the company is not liable to source any components from within India thus should not have to adhere to this policy. It sounded unreasonable to the Department of Industrial Policy and Promotion (DIPP) too and it shot down the request. However, the company has re–appealed and surprisingly DIPP has promised to consider it again on a case-by-case basis.

Apple is very justifiably interested in India. Coupled with rapid adoption of smartphones, the country has exhibited its preference to premium hardware. However, will it be right to set aside the law to ensure Apple setups its stores here?

Source | BGR

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