You are forgetting India is a land of 1.3 billion people. There are at least 50 - 100 million people who are willing to spend more than 500$ on a phone. That's a big enough market for Apple to consider.
Yep, but it's growing. The premium segment(above 500$) is the fastest growing segment of the market. And even the segment just below it (300$ - 500$) is a chunky portion of the market who are all potential customers for the premium segment.
In the future apple's phones would be 1500 plus. They are already making loss. Apple's positioning in India is as a 'premium' brand. It's price is so high that even IT employees buy in EMI. Meanwhile Chinese android phones haves 95% of the quality at 1/5th the price. There is no market fit
