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

Pic: Shutterstock

Textiles | On 22nd Feb 2020

Pharr sells Pharr High Performance to Coats Group

Pharr, a provider of differentiated textile products and assorted...

Pic: Shutterstock

Textiles | On 22nd Feb 2020

TOAI highlights importance of textiles in auto industry

The first edition of the conference 'Textile Opportunities in a...

Pic: Shutterstock

Textiles | On 22nd Feb 2020

Cocona's 37.5 fibres to have new biodegradable additive

All of the 37.5 staple fibres and filament yarns by Cocona, will now...

Interviews View All

Smita Murarka, Amanté

Smita Murarka
Amanté

‘There is huge demand in the Indian lingerie market for non-wired styles.’

Top executives, Textile industry

Top executives
Textile industry

Defining MSMEs on the basis of turnover makes it simpler to do business

Akash Khetan, Narayan Tex Fab

Akash Khetan
Narayan Tex Fab

I find it hard to find professionals in Surat

Simon Daplyn,

Simon Daplyn

Switzerland-based Sensient Imaging Technologies is a pioneer with a global ...

Oliver Schmitz,

Oliver Schmitz

Germany-based Gmöhling is a leading manufacturer of aluminium containers...

Iacopo Pardini,

Iacopo Pardini

Founded in 1953, Italian engineering company Arioli Spa started...

Isabel Herranz, European School of Business & innovation

Isabel Herranz
European School of Business & innovation

Cutting-edge ideas like the Internet of Things and artificial intelligence ...

Luis Quijano, Liberty University

Luis Quijano
Liberty University

Focusing on bold patterns and colour palettes, Luis Quijano, a student at...

Eamonn Tighe, Nature Works LLC

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Madhu Jain, Madhu Jain

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Seema Agrawal, Artisan Saga

Seema Agrawal
Artisan Saga

Artisan Saga, founded by Kaushik Rajani and Seema Agrawal, is an online...

Seema Agrawal, Artisan Saga

Seema Agrawal
Artisan Saga

Artisan Saga, founded by Kaushik Rajani and Seema Agrawal, is an online...

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

Leave your Comments


February 2020

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


Advanced Search