Budget 2019: Apple Stores likely to open soon as Sitharaman proposes easing local sourcing norms in single-brand retail

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New Delhi | Updated: Jul 05, 2019 6:08 PM

Budget 2019: FM Nirmala Sitharaman has proposed easing up the local sourcing norms that are likely to benefit Apple

Budget 2019: Apple may see the proposal of easing up local sourcing norms as an opportunity to open the Apple Stores in India (Source: Reuters)

Budget 2019: In what may come as a welcome respite to Apple, union Finance Minister Nirmala Sitharaman proposed easing up the local sourcing rules in single-brand retail in India in her budget speech. Apple has been hustling to get a nod from the government for setting up its retail stores in India to boost slumping sales. After about three years, Apple may see an opportunity to pitch its fresh proposal to open the iconic Apple Stores across India.

While giving her speech, the Finance Minister said FDI inflows in India have been “robust” as the global investment into India’s sectors has slid by 13 per cent in 2018 from $1.3 trillion from $1.5 trillion. At large, these lucid norms in local sourcing will attract Apple and other smartphone companies to grow their offline presence by opening wholly-owned stores.

Presently crippled by the strain induced by the regulatory mandates between the US and China, Apple is mulling ways to remove the roadblocks, which includes moving the manufacturing to other markets with an abundance of cheap labour. India has come across as a lucrative market that holds potential for the big tech companies to tap into the demographic that has shown the capacity to afford premium products.

Read | Budget 2019: AI, VR, robotics, other skills to be trained to Indian youth for high-paying jobs, says FM

Apple did not respond to our query immediately.

But Apple has more diverse plans for India – it has been wanting to bring the Apple Stores to India to boost sales in the offline market. However, the clause of ‘cutting-edge technology’ in Apple’s pitch to the government painted an unfavourable picture while availing rebates in the process of setting up the retail stores. If the proposal materialises in the Parliament, it will be of aid to the Cupertino-based company.

“Apple will gain momentum in its plans of opening the Apple Stores in India that have been delayed for quite some time,” said Tarun Pathak, Research Director at the research firm Counterpoint Research. Analysts are terming Sitharaman’s proposal beneficial not only for Apple but for other brands that have been eyeing to penetrate into the retail sector, which has been dominated by the likes of mom-and-pop stores in India. “Apple will eventually focus on manufacturing the latest iPhone models on a mass scale in India after it manages to open the Apple Stores,” Pathak added when asked about the prospects in the expansion of manufacturing facility by Apple.

Amid the tentativeness that Sitharaman’s proposal has offered, Apple was recently reported to be securing three top spots in various localities of Mumbai to begin the greenfield project ahead of formalising the setting of Apple Stores. It is not clear whether the locations marked by Apple have been finalised, or whether the company has come to the terms of acquiescence.

OnePlus, one of the leading premium smartphone companies in India, announced it will set up the world’s largest facility that will be a one-stop centre for the company’s entire portfolio in Hyderabad. The company is increasing its investments into the Indian smartphone market but at the same time, it is stressing the need for transitioning from the online space to the offline retail market, which still accounts for driving volume sales.

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