India liberalizes foreign direct investment (FDI) rules for many sectors. Consequently, it opens new avenues for global investors and giants.
India’s move today comes as the nation grapples with a slowing of economic growth. The economic growth in the quarter that just ended stood at 5.8%, a five-year low in the nation.
Its government said on Wednesday that the move is intended to easing sourcing norms for single-brand retailers. Besides, as part of the new proposal, the government said single-brand retail companies will be allowed to open online stores before they set up a presence in the brick-and-mortar market.
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A win for Apple
Over the years, Apple has requested the government numerous times to relax the local FDI rules. Up to now, Apple sells its products in India through partnered third-party offline retailers and e-commerce platforms. The platform range from Amazon India, Flipkart, to Paytm Mall.
Moreover, Apple’s company executives have long expressed disappointment at those platforms. That comes from their heavy discounts on the iPhone and MacBook Air to boost their respective GMV metrics.
However, with this move, Apple will have the chance to start selling a range of products through its own online store.
New Delhi previously also forced companies like Apple to source 30% of their productions locally (PDF). But now the government says it is broadening the definition to include both materials sold in India and those exported in the local sourcing law.
India has emerged as one of the world’s biggest battlegrounds for smartphone vendors. The local smartphone market, which is the fastest-growing globally and also the second-largest, was once commanded by local smartphone manufacturers.
However, things have changed in recent years. Currently, Chinese phone makers such as Xiaomi, Vivo, OnePlus, Oppo and Realme and South Korean giant Samsung together controlling 90% of the market.
Therefore, Apple remains optimistic to largely focus on users looking for a premium smartphone in India.