Apple's India plans have bureaucratic hurdles

“I love India but I believe Apple has some higher potential in the intermediate time in some other countries. We have a business there and the business is growing, but the sort of the multilayer distribution there really adds to the cost of getting products to market.”--Tim Cook

At Apple's last quarterly earnings call, Tim Cook irked several Indian technology enthusiasts when he said India wasn't on Apple's exapnsion list. At the time Cook did not reveal anything beyond what he said above. However, as it turns out, the India's laws might have something to do with Cook's remarks.

In a recently passed decision, the Indian government has allowed Foreign Direct Investment (FDI) in the retail sector. The decision is seeing quite a bit of political friction and the fine print seems to be a dampner on a lot of enthusiasm. Amazon India has to work around a certain rule to setup operations in India, Apple has a different problem.

In a report for The Economic Times, Writankar Mukherjee & Chaitali Chakravarty say Apple does have plans to open their own stores in India. While Apple declined to comment on the report, India's new FDI in Retail policy might make this difficult for the company. Under the rules, for a foreign retailer 30% supply needs to be sourced locally. Apple India's current problem is selling their product through a reseller network; if the company wants to fix this by opening their own stores, they face another roadblock--that of having local inventory. A solution for Apple to consider might be procuring accessories made in India.

Maybe India isn't that business friendly afterall.