If you are a foreign retailer entering or expanding in the Indian market, you will need an Indian joint venture partner, to evolve strategy around store location, back-end infrastructure and procurement contracts and to obtain necessary regulatory approvals both at the centre and state levels. The process of set-up (i.e. market analysis through to store opening) can take a minimum of 18 months for any new entrant. If you are an Indian retailer, existing operations will need to be restructured to meet policy conditions for a potential FDI partnership.
The government of India recently permitted 51% foreign direct investment (FDI) in multi-brand retail. However, when fibre2fashion spoke to a few #
On 20 September 2012, the government of India issued a notification that will go a long way in developing India as an important market for single-brand players. Single-brand retail trading rules have been simplified by making them more business friendly.
The government of India recently permitted 51% foreign direct investment (FDI) in multi-brand retail. However, when fibre2fashion spoke to a few #
Single brand retail trading:
The earlier FDI policy on this segment of the retail trading window allowed 100% FDI, with government approval, subject to the following key conditions:
• Products should be only of a single brand.
• Products should be an international brand.
• Products should be branded during manufacture.
• The investor should be the brand owner.
• Thirty per cent should be mandatorily sourced from small enterprises of the value of goods sold. (Not applicable in case the FDI was capped to 51%).
The government of India recently permitted 51% foreign direct investment (FDI) in multi-brand retail. However, when fibre2fashion spoke to a few #
Realising the difficulty in complying with the sourcing condition, considering single-brand retail players typically deal with speciality and hi-tech products, the government has now enabled 30% sourcing to be undertaken from anywhere in India.
The government of India recently permitted 51% foreign direct investment (FDI) in multi-brand retail. However, when fibre2fashion spoke to a few #
Only a preference has been stipulated to use small and medium enterprises for sourcing. For convenience of initial roll-outs, the sourcing compliance requirement for first 5 years has been averaged. After this period, it will be annual compliance.
The government of India recently permitted 51% foreign direct investment (FDI) in multi-brand retail. However, when fibre2fashion spoke to a few #
Additionally, the sourcing commitment will now be counted on the basis of the value of goods ’purchased’ as against the earlier value of goods ’sold’. The policy now also permits a person other than a brand owner (e.g. licensee/ franchisee) to invest into a single-brand retail company on a territorial exclusivity basis.
The government of India recently permitted 51% foreign direct investment (FDI) in multi-brand retail. However, when fibre2fashion spoke to a few #
The government of India recently permitted 51% foreign direct investment (FDI) in multi-brand retail. However, when fibre2fashion spoke to a few #