The Government of India on Wednesday relaxed the FDI rule for single-brand retailers. The move will help foreign brands looking to invest in India. As a part of the new proposal, single-brand retail companies will be allowed to open online stores before they set up a presence in the brick-and-mortar market. The government said that the latest move will lead to greater flexibility and ease of operations for SBRT entities.
This means that single-brand retailers like Apple will be allowed to start selling its products through its online stores. According to a report by Economic Times, executives aware of Apple’s plan revealed that the webstore will likely come up over the next 3-5 months for the Indian market. The company is also planning to set up its first retail store in Mumbai. “We appreciate the support and hard work by Prime Minister Modi and his team to make this possible and we look forward to one day welcoming customers to India’s first Apple retail store. It will take us some time to get our plans underway and we’ll have more to announce at a future date,” Apple said in a statement Thursday. “We love our customers in India and we’re eager to serve them online and in-store with the same experience and care that Apple customers around the world enjoy,” the company added.
The FDI policy required 30 percent of the value of goods to be procured from India, but as per the new rules, the 30 percent local sourcing norm is allowed either through domestic sales or exports for 5 years. Apple had requested the government numerous times to relax this FDI rule.
In a press conference, Piyush Goyal, Commerce and Industry Minister, said “It has been decided that all procurements made from India by the single-brand retail trade entity for that single brand shall be counted towards local sourcing, irrespective of whether the goods procured are sold in India or exported. Further, the current cap of considering exports for five years only is proposed to be removed, to give an impetus to exports,”.
Earlier this year, Apple started assembling several iPhone models locally in India to avoid import duties and enjoy tax benefits. The relaxed FDI rules will help Apple bolster its presence in India. Being able to sell directly to customers will also offer an improved experience.