Six global retailers apply for 51% stake of India ops

India has received six proposals from global single-brand retailers seeking permission to own 51 per cent of their operations in the country, the commerce ministry said on Monday.

Retailers who have applied to the government include Tommy Hillfiger, clothing retailer Brooks Brother Group, Italian jewellery brand Damiani International, French brand Promod SAS, Fapa Company Ltd and NA Pali Europe SARL, a unit of sportwear retailer Quiksilver Inc.

Many of these retailers are already present in India via licensing and joint venture partnerships with Indian retailers.

The government has not taken a decision on these proposals, the ministry said in a statement.

Recently an application by Zara owner Inditex SA to sell a more upscale brand through a joint venture with Tata Group’s retail arm, Trent Ltd, was rejected by the Foreign Investment Promotion Board.

In January, India allowed foreign single-brand retailers to set up wholly owned operations in India, but a requirement that companies source 30 per cent from small local firms has discouraged retailers from applying for full ownership.

Only IKEA and Pavers, a British shoe chain, have applied so far hoping to bank in on rising middle-class incomes and an expanding appetite for global brands and lifestyles.

The statement said no decision had been taken on modifying the sourcing norms, a widely expected move from the government as it struggles to attract overseas investors in the sector.