Dive Brief:

• India’s Department of Industrial Policy and Promotion has recommended that Apple be made exempt from regulations that prevent foreign retailers from opening their own stores there, a move that CEO Tim Cook himself has lobbied Indian government officials to make for months.

• Apple currently depends on local Indian merchants for its sales, but the Indian government says that its cutting-edge, state-of-the-art technology is reason to free the company from legal foreign-investment obstacles, the Economic Times reports. The government’s Finance Ministry still must approve the exemption.

• India is increasingly seen as a place for retailers to boost sales now that once-lucrative China is seeing its record consumer sales growth ebb. In a sign of the times, activist investor Carl Icahn said Thursday that he has sold all of his Apple shares over concerns about the Chinese government’s ability to stymie Apple’s sales there.

Dive Insight:

Lately there’s been much talk and worry about China’s long-term growth prospects, and what that means for retailers counting on expanding in the country. At the same time, India presents retailers with compelling growth opportunities, with some advantages that can’t be found in China, including an emerging middle class that includes a large mobile-first younger generation.

Overall retail sales in India are projected to double to $1 trillion by 2020 from $600 billion last year, according to the Boston Consulting Group, which adds that e-commerce sales there are projected to quadruple in the next five years, to $60 billion or $70 billion. 

But retailers looking to do business in India have been stymied by the nation's rules on foreign-direct investment. In order to open a single-branded retail store in India, merchants must source 30% of their products from Indian companies. Apple, which manufactures most of its products in China, fails to meet that requirement.

Indian officials are making changes in a big way, however. Just last month, the government agreed to allow up to 100% foreign ownership of e-commerce marketplaces, and both web and brick-and-mortar retailers operating there have garnered some decisive new advantages. 

That move appeared to leave Apple’s appeal to run its own Indian stores in the dust, but the government has now moved to give the American tech and retail company its own special pass.

In a conference call with analysts this week, Apple CEO Cook said that “India is where China was seven to 10 years ago.” Even without the benefit of its own stores there, Apple's first-quarter Indian sales grew 56% year over year.