India’s FDI Policy Changes Could Pave Way for Apple & Tesla Entry

The change in FDI policy in India could open up gates for Apple to set up retail stores in the country.

Looks like Apple’s wish to set up shop in India has finally got the Centre’s approval. The latest revisions to the FDI policy indicate that the Narendra Modi-led government is hopeful that global brands like Apple and Tesla will become the face of the ‘Make in India’ programme in the coming years.

This is why the recent changes to the FDI policy in retail stand out, and will definitely please the executives in Cupertino.

Sourcing norms will not be applicable up to three years from commencement of the business, ie, opening the first store for entities undertaking single brand retail trading of products.

Department of Industrial Policy and Promotion (DIPP) FDI Policy

Keeping this in mind, brands like Apple and Tesla are be sure to reap the benefits and be encouraged to finally sell their products via original retail outlets.

Till date, Apple has been selling its products via authorised resellers in India.

This ruling is very much in line with what Apple had put in its list of requests, which is now officially part of the FDI policy. The interesting points to note from the policy is the use of terms ‘state-of-the-art’ and ‘cutting-edge’.

Also Read: Apple Wants Tax Breaks for Suppliers in India to Make iPhones

This ruling is applicable on brands having ‘state-of-the-art’ and ‘cutting-edge’ technology, and where local sourcing is not possible.

DIPPs FDI Policy

A committee under the Chairmanship of Secretary, DIPP, with representatives from NITI Aayog, concerned Administrative Ministry, and independent technical experts on the subject, will examine the claim of applicants on the issue of the products being ‘state-of-the-art’ and using ‘cutting edge’ technology where local sourcing is not possible, and give recommendations for it.  

DIPPs FDI Policy

DIPP, along with Niti Aayog, will preside over any such applications submitted and scrutinise it before giving the go-ahead.

However, we’re not only excited for Apple with this development, we’re excited about Tesla as well.

The conditions of ‘state-of-the-art’ technology haven’t been clearly stated in the revised policy, which could cause complications. 

Elon Musk may not have shown any keenness to start manufacturing in the country, but he was hopeful of bringing the cars to the market earlier. Earlier this year, he even tweeted that India’s local sourcing norms don’t work in Tesla’s favour.

Maybe I'm misinformed, but I was told that 30% of parts must be locally sourced and the supply doesn't yet exist in India to support that.

— Elon Musk (@elonmusk) May 22, 2017

The change in sourcing norms should come as a big relief to them, enabling them to import Tesla cars earlier than imagined.

Also, with India ambitiously eyeing a 2030 timeline to switch to sources like electric cars, Tesla’s interest needs to be taken seriously, at least for the sake of the future of transportation in India.

Also Read: Musk Tweet Suggests Tesla Not Likely to Enter India Anytime Soon

Now that the regulations have been eased, it’s time Apple and Tesla made the best of it.

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