Apple can finally open its retail stores in India, after the government announced sweeping reforms for foreign direct investment in single brand retail today. This is a significant boost for Apple's ambitions in one of the world's fastest-growing smartphone markets, at a time of slowing sales everywhere else.

SEE ALSO:Apple announces app development accelerator in Bengaluru to start Tim Cook's India visit

Apple will benefit from a three-year relaxation from local sourcing norms that requires all foreign single brand retail stores to source 30% of their goods from within India. Companies selling products with "state of the art" and "cutting-edge" technology will get an additional five-year grace period, though the Indian government hasn't decided whether Apple meets the criteria to be considered for this exemption. If it agrees, Apple could potentially get an eight-year exemption from local sourcing.

Apple had earlier requested the Indian government to waive the mandatory domestic sourcing rule. It will now to have to submit a fresh application to open its stores in India. Apple CEO Tim Cook also met Indian Prime Minister Narendra Modi to discuss the company's plans in India during his high-profile visit to the country last month. The Indian government had however rejected Apple's proposal to sell cheaper, refurbished iPhones in India due to their risk for increasing e-waste.

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Unlike smartphone makers such as Xiaomi, Samsung and Micromax, Apple continues to import its products into India from China, making them considerably expensive. The Indian government is offering sops to those who assemble smartphones under its 'Make in India' initiative. While the company only has a 2% share in India's price-sensitive smartphone market, it has seen brisk iPhone sales in the country in the last year via aggressive discounting and buyback schemes. Its sales in March quarter also increased by 56%, indicating a growing demand for its iPhones.

In keeping with its new emphasis, Apple has been investing in India in several ways. During Cook's visit, it inaugurated a maps development office in the city of Hyderabad and announced that it would launch an app design and development accelerator in India's IT capital Bengaluru. While opening stores in India might not automatically increase Apple's small market share, it might help the company build its brand presence in the country. 

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