Two senior government officials have said that Apple is ‘discussing with the Indian government the possibility of manufacturing its products in the country,’ reports the WSJ. Apple is said to be seeking financial incentives in order to proceed.

Apple has been trying for some time to open retail stores in India, plans which have been stymied by a government requirement to source 30% of products locally in order to be permitted to open single-brand stores. There have long been contradictory reports that Apple may or may not be granted an exemption.

The Indian market holds massive potential for Apple for two simple reasons …

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First, it’s the second most populous country in the world after China, at 1.3 billion people, with a rapidly-emerging middle-class. Second, Apple currently has only a 5% market share there, leaving enormous scope for growth. It’s likely that India will at some point become a larger market for Apple products that the USA.

There have been multiple reports that Foxconn is planning to build a $10B iPhone manufacturing plant in India, but no confirmation from either company. The WSJ report suggests that Apple has drawn up specific plans.

In a letter to the government last month, the Cupertino firm outlined its plans and sought financial incentives to move ahead, the officials told The Wall Street Journal. Senior Trade Ministry authorities in recent weeks met to discuss the matter.

The Indian government is said to be considering Apple’s request.

India isn’t the only country to impose a 30% local investment requirement on Apple, Indonesia doing the same in order to grant permission for the company to sell the iPhone 7. In that case, Apple met the threshold by last week agreeing to invest $44M in an R&D center in the country.

Photo: Russ Bowling

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