Home / Knowledge / News / Apparel/Garments / Foreign apparel retailers wary of 30% sourcing clause
Foreign apparel retailers wary of 30% sourcing clause
25
Jan '12
The notification issued by the Government of India earlier this month for allowing up to 100 percent foreign direct investment (FDI) in single brand retail puts a condition of 30 percent sourcing from local small and medium enterprises, in case of foreign investment exceeding 51 percent.

The 30 percent sourcing clause is likely to pose hurdles for foreign apparel retailers wanting to enter the Indian market. Several well-known brands like Abercrombie, Prada, GAP and Hennes & Mauritz are eager to open their outlets in India on their own.

Some global retailers who are already present in India may now look forward to increase their share in the Indian market. These include brands like Christian Dior, Zara, Canali, Louis Vuitton, Jimmy Choo and Marks & Spencer.

Speaking to fibre2fashion, Ms. Anku Nath, Director (Trade Policy Advocacy) at the US-India Business Council (USIBC), said, “The relaxation of FDI cap in any sector can be expected to attract additional investment, technology and expertise from global firms, and the same holds true for India's apparel sector.”

Analysing the impact of the new policy on Indian apparel sector, she says, “Though it is difficult to predict the exact implications of the recent increase in FDI limits for the single-brand retail sector, we expect that global apparel companies will consider setting up or expanding their existing operations in India. Investors will find a skilled workforce to staff operations and a rising middle class of consumers eager to purchase their goods. India's apparel sector stands to benefit as investment and world-class technologies are incorporated into new operations.”

Reacting to the '30 percent sourcing' clause, she says, “The clause certainly merits further examination, and industry is eager to engage with the Department of Industrial Policy & Promotion (DIPP) to better understand how it will be applied for various sectors and types of retailers. Developing a supply chain that includes a significant sourcing requirement from 'small industries / village and cottage industries, artisans and craftsmen' is not an easy task and it will take time to accomplish. Companies will need to fully evaluate their business models' abilities to take on such a requirement.”

“We believe that the opening of single-brand retail in India is a great opportunity for global apparel retailers,” she concludes.

Fibre2fashion News Desk - India

Must ReadView All

Textiles | On 6th Dec 2016

Cash inflow will revive sales: Textile industry

The textile industry representatives are hopeful of revival of...

Courtesy: EFI Reggiani

Textiles | On 6th Dec 2016

EFI Reggiani shows inkjet textile solutions at India ITME

EFI Reggiani, a leading technology provider of a full range of...

Textiles | On 6th Dec 2016

Demonetisation may increase formal sector share: Ind-Ra

Demonetisation coupled with the government’s resolve to promote the...

Interviews View All

Milind Khandwe
Hindoostan Innovation Centre

‘Modern technical textile is an indispensable tool for science and...

Yash Agarwal
Hitansh Online

Every market region has its own culture and trends

Giovanni Pizzamiglio, Paolo Crespi & Riccardo Robustelli
Epson, For.Tex & F.lli Robustelli

‘The percentage share of printing in the global textile market is pretty...

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
December 2016

December 2016

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


Advanced Search