Dive Brief:

• The Indian government will allow foreign retailers an exemption from a requirement to source 30% of goods in their stores from local manufacturers, Reuters reports.

• The new rule will allow Apple, which has lobbied for such an exemption in a quest to increase sales of its phones and tablets (and which enjoys just a 2% share of that market in India), to establish stores on its own rather than relying on third-party retailers there, as it does now.

• Apple, which produces virtually all of its devices in China, had sought an exemption from Indian officials by citing a clause that exempted retailers of "cutting edge" technology from the local sourcing requirements. India's finance ministry last month rejected that notion.

Dive Insight:

India has established a series of arcane foreign investment rules designed to protect homegrown businesses, but has been under pressure to clarify those rules as e-commerce startups battle for market share and as retail continues to evolve far beyond more traditional mom-and-pop stores.

Earlier this year the Indian government moved to solidify and clarify foreign direct investment rules regarding e-commerce, moves seen as opening the door to more foreign investment while also establishing limits to protect local and brick and mortar retailers. Those rules increase how much foreign investment e-commerce players (including Indian powerhouses like Flipkart and Snapdeal) can accept, but limits them to operating as marketplaces. 

Making inroads in India has been a particular goal of Apple CEO Tim Cook, who has traveled there several times and met with Indian government officials, including Prime Minister Narendra Modi, as recently as last month. These latest rules will allow Apple to establish stores and will help other foreign retailers, too, like Ikea, which also has found it difficult to meet previous requirements for local sourcing. (The Swedish furniture retailer was granted a waiver that gave it time to work on building its locally sourced offerings in India, but has slowed its expansion there after encountering some difficulties in making its deadline.)

India has been a shining star for many retailers, including Apple, since growth in the massive Chinese market has slowed in recent months. India, with a large young mobile-first generation and emerging middle class, is the world's fastest growing large smartphone market, with sales poised to increase more than 25% this year alone, according to Reuters.