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Apple Moves One Step Closer To Entering The Indian Market

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Apple Moves One Step Closer To Entering The Indian Market

The Wall Street Journal reported Thursday that Apple Inc. (NASDAQ: AAPL) delivered a letter to India's national government last month, expressing its intent of manufacturing Apple products in the Indian market.

India's Protectionist Laws

India's tough protectionist laws make it nearly impossible for companies like Apple to sell its products in its own branded stores unless part of the manufacturing materials come from Indian vendors or are manufactured in India.

Apple said in its letter that it is requesting financial incentives from the government and some compromised regulations to manufacture products in the country. The government has a program in place called "Make in India," which does provide capital subsidies Apple is looking for.

Members from India's Ministries of Trade, Finance, Electronics and Information Technology, Forests and Environment will gather early next week to evaluate Apple's proposal.

Possible Outcome

If Apple and the Indian government come to an agreement, Apple should be able to open its own Apple-branded stores in the country and sell directly to the consumer. Currently, Apple sells its products through a network of Indian-owned retailers and distribution companies.

The timing is ripe for an expansion since Apple commands a less than 5 percent of the fast-growing smartphone market. In fact, India's smartphone market could overtake the United States next year and become the world's second-largest market after China.

Several Wall Street analysts, most notably Trip Chowdhry of Global Equities Research, believe Apple's next leg of growth will stem from the lucrative Indian market.

 

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