- Angela Gonzalez-Rodriguez |
New York – India’s government has just announced its plan to ease foreign direct investment (FDI) norms for the single-brand retail sector as well as to relax the sourcing norms for these entities. The move is expected to allow such companies as H&M, Uniqlo and Puma to expand their footprint in the country.
As reported by local media on Friday, the tweaks to the current FDI policy, which mandates that a single-brand retail company that has more than 51 percent FDI in India has to source 30 percent locally of the total value of goods sold in the country, allows foreign retailers to include exports as well.
“We are delighted. H&M has been sourcing from India since the last 30 years for its international markets. We see this supporting the ease of doing business in India and driving in larger investments from global companies,” said Janne Einola, country manager for H&M India.
“I see this as a big opportunity for apparel companies, where Indian factories have strong capabilities,” said Puma India MD Abhishek Ganguly.
Similarly, the goods sourced from a contract manufacturer, in which a company invests, will be counted for the purpose. Additionally, single-brand retailers will be able to open online stores before setting up physical stores in the country. “This will help new entrants,” said Pinakiranjan Mishra, partner, consumer products and retail, EY India.