Compromise said to be likely in India, providing go-ahead for Apple’s planned retail stores

Apple products in India are currently sold through authorised resellers

Times of India is reporting that a compromise is likely to be reached that will allow Apple to proceed with plans to open retail stores in the country despite rules that currently prevent this. If confirmed, it will be an important step for Apple in what Tim Cook expects to become a huge growth market over time.

I sort of view India as where China was seven to ten years ago from that point of view. I think there’s a really great opportunity there.

There are currently no official Apple Stores in India because of a rule that requires companies to manufacture at least 30% of their products within the country before they can open a single-brand store. Products are currently sold via a network of authorised retailers …

There is an exemption for companies making ‘cutting-edge technology’ products, and it had initially been reported that Apple would benefit from this before a second report contradicted this.

While Apple has plans to manufacture iPhones in India, Foxconn set to build a $10B manufacturing plant there, this will take 18 months to come online – and is seemingly the basis for the reported compromise.

The government is expected to allow Apple to open its own retail outlets in the country without any sourcing requirement for two-to-three years as it tries to work out an arrangement under which the Cupertino, California-based company will agree to local purchases once it gets a stronger toehold in the country.

Apple has told the Indian government that it is already buying chargers from India, not just for sale within the country but for export to other markets too. Apple is also opening a development center and iOS App Design and Development Accelerator in the country.

Given the contradictory past reports, and conflicts between different government departments in the country, we’re adopting a wait-and-see position on this one …