Home / Knowledge / News / Textiles / Foreign single-brand retail to benefit as Govt eases rules
Foreign single-brand retail to benefit as Govt eases rules
28
Nov '15
The Government's decision to relax mandatory 30 per cent local sourcing norms has come as a shot in the arm for global brands in India, according to media reports.

The decision earlier this month allows mass brands including Swedish home furnishing major Ikea to comply with such sourcing norms from the day their first store opens rather than from when the first tranche of investment is made.

Ahead of the Government's announcement, Ikea which has committed for Rs 12,500 crore investment in India, had sought relaxation for five years over mandatory 30 per cent local sourcing norms from opening of its first store in India.

In a statement, Ikea had said it needs some time "to build a sustainable and long term sourcing solutions" to source raw material, find local entrepreneurs and to create industrial set ups.
The Government's announcement also included allowing foreign single-brand entities to sell products through online channels provided they have permission to sell through brick-and-mortar stores.

The relaxation in foreign direct investment norms will cheer companies including tech major Apple, which was earlier expected to source 30 per cent of its products locally.

"It is seen that in certain high technology segments, it is not possible for retail entity to comply with the sourcing norms. To provide opportunity to such single brand entities, it has been decided that in case of `state-of-art' and `cutting-edge technology,' sourcing norms can be relaxed subject to government approval," according to an official notification.

Ikea has welcomed the decision saying the time to comply with the 30 per cent local sourcing norm from store opening will support brands in building long term sustainable supply chains that are good for India, good for the businesses and will enable better prices to the Indian customers.

The policy changes will pave the way for single-brand retailers such as Swedish clothing company H&M to tap India's growing e-commerce business.

"FDI policy on the SBRT (single brand retail trading) provides that retail trading, in any form, by means of e-commerce, would not be permissible. It has been decided that an entity which has been granted permission to undertake SBRT will be permitted to undertake e-commerce activities," the latest policy paper said.

Proposals of companies including Tommy Hilfiger and Furla were stuck with the Department of Industrial Policy & Promotion for years because they had planned to set up their own stores and sell products through franchisees, which wasn't allowed. Now, such companies can engage in both wholesale trading - which is needed for sales through franchisees - and retail trading as long as it follows the norms for both segments.

Indian manufacturers with foreign investment that are controlled by Indians can now sell their products through online channels provided they make 70 per cent of the output and source the remainder from local companies. (SH)

Fibre2Fashion News Desk – India


Must ReadView All

Market share of Indian textile items expand in 13 nations

Textiles | On 11th Dec 2017

Market share of Indian textile items expand in 13 nations

Thirteen countries — Germany, France, Italy, the United States,...

Courtesy: EUBrasil

Textiles | On 11th Dec 2017

Euratex, ABIT welcome negotiations for EU-Mercosur FTA

European Apparel and Textile Confederation (Euratex) and the...

Most firms expect no change in investment plans: CII survey

Textiles | On 11th Dec 2017

Most firms expect no change in investment plans: CII survey

Despite visible optimism in Indian industry with the Confederation of ...

Interviews View All

Sanjay Desai & Ashish Mulani
True Colors

Digital textile printing will be the technology of the future

Ajay Ghariwala
Luthra Group

We are ready to adopt or follow every opportunity

Anshul Sood
Oceedee

‘Indian footwear market is nascent and largely a trend follower’

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Sugandha Bhardwaj

<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...

Vikas Banduke

Softech Controls Private Limited (SCPL) is a part of the Cotmac Group, an...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Akta Adani
India Boulevard

India Boulevard is a San Francisco-based curated fashion marketplace that...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

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 2017

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

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.2%
No
12.1%
Skip
18.7%

Total Votes: 91

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.5%
No
30.8%
Skip
7.7%

Total Votes: 91

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
86.8%
No
9.9%
Skip
3.3%

Total Votes: 91

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
81.3%
No
8.8%
Skip
9.9%

Total Votes: 91


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search