Shift in strategy: Apple seeks wholesale licence

Apple Inc wants to set up a fully-owned wholesale business in India, it is learnt. The maker of the iPhone and the iPad has made a proposal to the government for a wholesale foray, where up to 100 per cent foreign investment is permitted. The proposal, sent to the Department of Industrial Policy & Promotion (DIPP), does not refer to manufacturing or single-brand stores.

Apple did not respond to a query sent by Business Standard on its plan to seek wholesale licence. Prime Minister Narendra Modi had met Apple Chief Executive Tim Cook in September during his Silicon Valley tour. The PM had then invited Apple to set up a manufacturing base and Cook had responded positively. While there's no word yet on the American multinational making its products in India, its largest manufacturer Foxconn has decided to set up a base here.

Apple would like to lower its dependence on two large distributors in India and that's the reason it wants to get a licence to start wholesale business, a source said. Once it gets the green signal, it would enter into direct deals with resellers. The company, it is believed, wants to have over 1,500 outlets in the next two to three months via agreements with resellers.

In most emerging markets, Apple works through smaller stores in tie-up with resellers, while in the US and UK, it has signature outlets, said Gaurav Marya, promoter of franchising and licensing firm Franchise India. Other tech companies including Samsung and Xiaomi also have wholesale licence in India and they sell through tie-ups with resellers, he added.

DIPP has recently relaxed sourcing norms for foreign single-brand retail stores, keeping in mind niche tech companies such as Apple. On a case to case basis, the government has decided to go easy on the 30 per cent mandatory clause, hinting at an exemption. This is "to provide opportunity" to cutting-edge companies, the revised rules said. Earlier, many niche tech companies had pointed at the difficulty in complying with the 30 per cent sourcing norm linked to the single-brand retail policy. Apple was one of them.