Dive Brief:

• The Indian government may ease up somewhat on a local sourcing requirement that would make it easier for Apple to run its own stores in the country, the Times of India reports.

• The finance ministry in India last month rejected a recommendation by its department of industrial policy and promotion (DIPP) that Apple receive a waiver to foreign investment rules that require foreign “single brand” retailers to locally source at least a third of goods in stores. 

• Under the compromise being considered, the government may keep the rule in place but give Apple time—two to three years—to meet it. Other companies have enjoyed similar leeway.

Dive Insight:

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. India has been a shining star for many retailers, including Apple, since the slowing of growth in China in recent months. 

Previously, Apple could only sell its goods through third-party stores, but last year the government opened up a window of opportunity for foreign retailers to set up their own shops—the 30% sourcing mandate.

The latest round of discussions come after the DIPP based its waiver recommendation on the notion that Apple makes and sells "cutting-edge technology,” which would exempt it from the sourcing requirements, grounds that were rejected.

This back and forth among Indian government officials is an indication of how difficult it can be for even the government to wrestle with India’s arcane foreign investment rules. India has long been careful about protecting home-grown business, and earlier this year moved to solidify and clarify foreign direct investment rules regarding e-commerce. 

But Apple has other retail examples to look at when negotiating with the government. Swedish furniture retailer Ikea was granted a waiver that gave it time to work on building its locally sourced offerings in India, but has slowed its expansion in India after encountering some difficulties in making its deadline.