95 percent of cellphone users have prepaid accounts without a fixed contract. Unlike in the United States, carriers do not subsidise handsets.
Within the smartphone segment, Apple's Indian market share last quarter was just 5 percent, according to Canalys, meaning its overall penetration is tiny.
Still, industry research firm IDC expects the Indian smartphone market to grow more than five times from about 19 million units last year to 108 million in 2016, which presents a big opportunity.
Samsung Electronics dominates Indian smartphone sales with a 40 percent share, thanks to its wide portfolio of Android devices priced as low as $110. The market has also been flooded by cheaper Android phones from local brands such as Micromax and Lava.
Most smartphones sold in India are much cheaper than the iPhone, said Gartner analyst Anshul Gupta.
"Where the masses are - there, Apple still has a gap."
'I LOVE INDIA, BUT...'
Apple helped create the smartphone industry with the iPhone in 2007. But last year Apple lost its lead globally to Samsung whose smartphones, which run Google's free Android software, are especially attractive in Asia.
Many in Silicon Valley and Wall Street believe the surest way to penetrate lower-income Asian markets would be with a cheaper iPhone, as has been widely reported but never confirmed. The risk is that a cheap iPhone would cannibalise demand for the premium version and eat into Apple's peerless margins.
The new monthly payment plan in India goes a long way to expanding the potential market, said Chakrawarti.
"The Apple campaign is not meant for really the regular top-end customer, it is meant to upgrade the 10,000-12,000 handset guy to 45,000 rupees," he said.
Apple's main focus for expansion in Asia has been Greater China, including Taiwan and Hong Kong, where revenue grew 60 percent last quarter to $7.3 billion.
Asked last year why Apple had not been as successful in India, Chief Executive Tim Cook said its business in India was growing but the group remained more focused on other markets.
"I love India, but I believe that Apple has some higher potential in the intermediate term in some other countries," Cook said. "The multi-layer distribution there