“Between April 2010 and May this year, the govt approved a total of 18 FDI proposals worth $173 mn in the single-brand retail sector”.
India has had better luck with “single-brand retailers.”
Between April 2010 and May this year, the government approved a total of 18 foreign direct investment proposals worth $173 million in the single-brand retail sector.
In May, it cleared Swedish furniture chain Ikea’s Rs.10,000 crore investment proposal. Soon after, another Swedish retailer, H&M, put in an application to invest Rs.700 crore (this proposal is still to be cleared)
In February, the finance ministry cleared four proposals from foreign retailers for single-brand retail, including two from French sport goods retailer Decathlon and American fashion retailer Fossil Inc.
Head of the retail and consular practice at audit and consulting firm PricewaterhouseCoopers, said interest in single-brand retail remains high, although some companies are still looking for Indian partners (they needn’t), or waiting for the economy to revive.
In January 2012, India allowed 100% investment in single-brand retail.
Still, there are policy hurdles here too. Business Standard newspaper reported on 18 September that H&M’s proposal has been held up because there is some confusion as to whether the sourcing the firm currently does from Indian suppliers for its international operations can be included in the 30% local sourcing criteria.
Such kinks have to be ironed out, said Head – consumer products & retail practice at Bain and Co. India.