Mr Modi’s cabinet is likely to approve a three-year exemption on local-sourcing requirements for foreign single-brand retail companies with “cutting-edge technology,” according to the people, who asked not to be identified due to rules for speaking with the media.
At the same time, the government will make it easier for companies like Apple to meet that criteria, the people said.
The moves represent the latest shift for Mr Modi’s government, which has sent conflicting signals in recent months over Apple’s bid to set up shop in India.
Apple chief executive officer Tim Cook visited India for the first time in May as he seeks to tap the world’s fastest-growing smartphone market to counter slowing sales growth elsewhere.
India last year said it would exempt companies with “state-of-the-art technology” from a requirement to source 30% of components locally. In June, the commerce ministry sought to limit that exemption to three years, on top of the five years that all single-brand companies get to comply with local sourcing rules.
The finance ministry also questioned the definition of “cutting-edge technology,” complicating Apple’s plans.
Mr Modi’s push to clarify those procedures will pave the way for Apple to open a retail store, according to the people.
The new rules may also impact China’s Xiaomi Corp. and Leshi Internet Information & Technology Corporation, which have also asked for exemptions.
Representatives from Apple, Xiaomi and Leshi Internet didn’t immediately respond to e-mails seeking comment. Industry secretary Ramesh Abhishek didn’t respond to two calls on his mobile phone.
Apple’s market share in India is much less than Samsung Electronics and Micromax Informatics, which offer cheaper phones to price-conscious Indians.
While Apple currently sells its iPhones and iPads through franchisees as well as the retail units of India’s biggest conglomerates Tata Group and Reliance Industries, it wants its own stores to further boost sales.
In May, during Mr Cook’s first official visit to India, Apple announced it would open a development accelerator in the country’s technology hub, Bangalore, to provide specialised support to iOS app developers.
The new facility would give development access to tools to create innovative apps for customers around the world, he said.
Earlier this month, Google had also announced a plan to train 2m software developers in India.
“By fighting for these developers, Apple and Google are showing how serious they are about the Indian market,” Ankit Jain, associate vice-president product at website and app market analytics provider SimilarWeb, wrote in an e-mail this month.