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It is now the turn of the watch industry to push for relaxing the foreign direct investment cap on single brand retail.
The timewear industry has said FDI restrictions are not allowing international brands to have complete control over retailing and hence posing an impediment to its growth.
The All India Federation of Horological Industries and Technopak Advisors, which released a white paper on the Indian watch industry, also said the high duty on imported watches, grey market and taxation structure could prohibit the industry's growth.
“The last mile connectivity to the consumer is provided by the retailer. FDI restrictions are not allowing international brands to have complete control over retailing.
Subsidiary companies cannot invest due to regulatory restrictions and this could be an impediment. Fresh money inflow in the market shall lead to better distribution and marketing of brands,” Mr Yashovardhan Saboo, President, AIFHI, and CEO, KDDL Ltd, a watch retailer said.
‘Modern retail '
He said modern retail will be a great enabler as it triggers impulse buying behaviour.
Currently, 51 per cent FDI is allowed in single brand retail and 100 per cent in cash and carry. It is banned in multibrand retail.
Stating that the Rs 4,000-crore watch industry could grow to a whopping Rs 9,000 crore in three-five years, Mr Arvind Singhal, Chairman, Technopak, said, “The watch market in India is expected to grow between 10 and 15 per cent annually.”
The white paper also sought lower import duty on luxury watches and rationalised taxation structure.
It said factors such as growing economy, increasing consumerism, strong middle class and a large number of high net worth individuals would favour the growth of the market.
Mr Harish Bhat, CEO, Titan Watches, said the industry has to invest in brand building while the government must recognise the potential of the industry in becoming a manufacturing hub for watches and watch components.
“Only 27 out of 100 people in India wear a watch today. The industry would ideally like the number to move to 70 in the next couple of years. We need to learn from sectors which have grown due to duty rationalisation and excise benefit,” he said.
More jobs
According to the report there is an opportunity to generate additional total employment of around 80,000 people.
It also said employment in watch retail can reach up to 2.15 lakh people in the next five years.
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