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.



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