Foreign retailers such as Tommy Hilfiger, fashion brand Promod SAS, NA Pali Europe, Italian jewellery maker, Damiani International are likely to approach the Foreign Investment Promotion Board (FIPB) for entering India.

As of now, most of these brands are present in the domestic market through a licensing or franchise arrangement. After the new norms on foreign direct investment (FDI) norms in single-brand retailing and 51 per cent in multi-brand retail, these retailers are keen to go it alone, industry sources say.

Government sources said many foreign brands in lifestyle, apparels, footwear and jewellery are keen to own 51 per cent in single-brand retail operations in India.

Recently, Inditex-owned brand Zara had faced FIPB hurdles for setting up stores of Massimo Dutti, as the rules for single-brand retail stipulate that the company making the FDI proposal needs to also own the brand, not a different entity.

Officials said Zara can re-apply as the Department of Industrial Policy and Promotion (DIPP) has done away with the norm that the foreign investor has to own the brand it proposes to sell.

“The Centre has also been working on simplifying the single-brand retail policy, especially on the clause related to 30 per cent mandatory sourcing, after it received Swedish furniture retailer IKEA’s investment proposal,” they say.

IKEA and Pavers, a British shoe chain, have applied for 100 per cent ownership in single-brand retailing.

Ajay Muttreja, President, Technova, which specialises in cross-border market entry strategy, said India was likely to mop up FDI worth $2-3 billion in the multi-brand segment.

Last Friday, the Government, in a major policy decision, eased investments rules in multi-brand retail.

Sources said once the minutes of the Cabinet meetings are circulated, the nodal ministry, in this case DIPP, will issue the notification. Any new application can be filed only after the notification is issued.


Passage to India IKEA and Pavers have already applied for 100% ownership in single-brand retailing Tommy Hilfiger, Promod SAS, NA Pali Europe, Damiani International are the major brands looking to enter on their own India likely to mop up FDI worth $2-3 billion in the multi-brand segment, say analysts

(This article was published in the Business Line print edition dated September 20, 2012)
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