Policy had a heroic role in the Apple Store story Apextalk

Apple Watch data could prove it, but it’s safe to assume pulses were set racing among fans by news of its own stores ready for their debut in India next week. An ‘unveiling’ would be more apt a description for the event planned, given Apple’s love of arty elegance, visible in its logo as much as the stuff it adorns. Of the two local renditions of its famous bitten apple (think ‘byte of knowledge’), the one designed for Mumbai looks a bit kitschy, if colourful, while the other for Delhi offers vivid tribute to a city of jharokas and archways. To celebrate, its website has a portal with a music playlist. The capital’s, for example, is led by the soundtrack of Delhi-6, a 2009 Hindi film, with Rabbi Shergill’s classic Bulla ki Jaana cued up next. It’s all part of what Americans call laying on the charm. Apple Inc’s CEO Tim Cook, due for a visit that might include a meeting with Prime Minister Narendra Modi, recently called India a “major focus” as a “hugely exciting market.” Its iPhone sales here are looking up and so are its exports. It’s a win-win story, the kind we want global investors to notice, given that its success is the highlight of our China-plus-one pitch for value chains that girdle the globe.

Apple’s numbers for the country are suitably bright. By IDC data, it sold 6.7 million iPhone units here in 2022, up from 4.8 million in 2021 and 2.7 million in 2020. It’s a premium buy, so it must content itself with one in every 20 smartphones bought (144 million last year). But as rich markets saturate, it can count on upgrades here for years on end. The dazzle of snazzy stores, it must have reckoned, will engage buyers better than the dreary sales channels we have had so far. Indeed, the US-based company was so keen to open outlets of its own that it adapted its entire Indian game to our maze of retail rules. This is why policymakers may get tempted to join the festivities. Estimates peg Apple’s outward shipments of iPhones at nearly $5 billion in 2022-23. If so, this would be a hearty chunk of the $10 billion-plus worth of such handsets exported overall (as reported) and a feather in the Centre’s cap as a policy outcome. Back in 2017, the company had reportedly sought tariff relief for local assembly plus relaxation of an FDI rule for a fully-owned retail chain that required it to source 30% of the value of its saleable wares locally. After talks and tweaks, its Indian retail business can include what’s sourced for export in its tally to comply with that rule (as per a 2020 circular), it has a trio of vendors busy churning out iPhones here, and ‘Made in India’ volumes are rising robustly in response to public incentives for production under a self-reliance scheme. Thousands of local jobs have been created, with many more to come as Apple diversifies its supply chain away from China to make India another export hub.

For other investors to follow suit, though, India must diversify its policy hardsell. Apple’s success does not reflect how cost competitive its new game is. As a premium brand, globally, its gadgets make up a smaller fraction of its gestalt value than in the case of rivals. As a business, it had bet its future on setting itself apart, not sharpening a price edge. Typical trends in world trade, however, are dictated by dull prices distorted by national policies. The world is in geopolitical flux, so the distortion outlook is hazy. But our best bet for a China-plus economic boost would be to acquire a broad cost advantage that’s loud and clear.

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