(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)
By Shritama Bose
MUMBAI, Dec 3 (Reuters Breakingviews) - Doing business in developing countries is never straightforward, but India needs to make life easier for foreign firms. Apple (AAPL.O) is tussling with telecoms officials and antitrust watchdogs in the country. The U.S. company’s growing list of headaches undercuts New Delhi’s big push to open up the world’s fifth-largest economy to multinationals. The Cupertino giant’s stand-off with the telecoms ministry kicked off last week when the agency issued a directive for all handset-makers to install the controversial Sanchar Saathi app within 90 days on all new devices. The move is meant to help authorities track stolen phones and combat “serious endangerment” of cybersecurity and comes just weeks after a deadly terrorist attack in India’s capital. But it has sparked concerns about government surveillance on the country’s 730 million smartphones. The furore forced the telecoms minister to clarify the app can be deleted at any time. Even so, Apple intends to defy the order because ofprivacy and security issues, including for its iOS operating system, Reuters reported on Tuesday, citing sources. Management bandwidth is also getting sucked up in a legal battle with the Competition Commission of India, which last year found the U.S. firm led by Tim Cook had engaged in “abusive conduct” through its app store: Apple is challenging a potential fine of 10% of its global turnover, implying a maximum hit of $38 billion. The amount is so large because new antitrust laws target the firm’s global topline rather than local sales.
The $4 trillion company has the resources to fight these battles, but it’s a bad advert for those sitting on the sidelines. That a company that now makes iPhones in India is facing these headaches highlights t
he government’s struggle to really make things easier. That takes the sheen off Prime Minister Narendra Modi’s headline reforms, including an overhaul of rules introduced last month.
India needs many more companies like Apple. It needs to create jobs and boost the share of manufacturing up from 17% of GDP.Net foreign direct investment into the country dropped 96% to $400 million in the year ended March 31 compared to the previous year, due to a repatriation of funds by foreign investors and outbound investments by domestic firms.
Other multinationals that are expanding in India include Alphabet’s (GOOGL.O) Google, which is pouring $15 billion into data centresOfficials have also tried to entice Tesla (TSLA.O) to set up a factory, offering land in Maharashtra, per local media reports. Apple’s troubles spotlight why many may choose to hold back. Follow Shritama Bose on LinkedIn and X.
<h3>CONTEXT NEWS</h3>
Apple does not plan to comply with an Indian government mandate to preload smartphones with a state-owned cyber safety app and will convey its concerns to New Delhi, Reuters reported on December 2, citing three unnamed sources familiar with the matter.
India’s telecoms ministry on November 28 confidentially ordered companies including Apple, Samsung and Xiaomi to preload their phones with an app called Sanchar Saathi, or Communication Partner, within 90 days, Reuters reported on December 1, citing the order. The app is intended to track stolen phones, block them and prevent them from being misused.
Net foreign direct investment into India is falling
<img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/BRV-BRV/xmpjqnddgvr/chart.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="1420" height="978" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/BRV-BRV/xmpjqnddgvr/chart.png"/>
(Editing by Robyn Mak; Production by Ujjaini Dutta)

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Apple is facing challenges in India, including a directive to install a government app on new devices and a legal battle over antitrust issues. These issues highlight the difficulties foreign companies face in India, potentially deterring other multinationals. Despite India's efforts to attract foreign investment, net foreign direct investment has significantly dropped.

- India faces challenges in attracting foreign firms, as exemplified by Apple's ongoing disputes with telecom officials and antitrust regulators.  
- The government's recent directive for smartphone manufacturers to install a surveillance app has raised privacy concerns, complicating Apple's operations in the country.  
- Despite the potential for growth, net foreign direct investment in India has significantly declined, highlighting the need for improved business conditions to attract multinationals.  

BREAKINGVIEWS-Apple woes undercut India's opening-up drive