100% FDI for Single Brand Retail

Impacts & Issues Click to edit Master subtitle style

5/14/12

Dr. Manoj Kumar

11

Retail

The Govt. of India has notified 100% FDI in single brand retail. The size of India's retail sector is currently estimated at around $450 billion. The Associated Chambers of Commerce and Industry of India estimates that the country's retail sector will be worth US$1.3 trillion 5/14/12 22 annually by Dr. Manoj Kumar 2018.

Provisions of notification

Products to be sold should be of a Single Brand only. Products should be sold under the same brand internationally i.e. products should be sold under the same brand outside India as well. Single Brand product retail trading would cover only products which are branded during manufacturing.
Dr. Manoj should be the owner 33 The foreign investorKumar

5/14/12

Provisions of notification

For any FDI beyond 51%, mandatory sourcing of at least 30% of the value of products sold would have to be done from Indian small industries / village and cottage industries, artisans and craftsmen. ['Small industries' would be defined as industries which have a total investment in plant & machinery not exceeding US $ 1.00 million (about Rs.5 crore).]
5/14/12 Dr. Manoj Kumar 44

Impact on international brands present in India

Brands like Adidas, Louis Vuitton and Gucci likely to move towards full ownership of their India operations. PAVERS applies for a license. Diesel, Paul and Shark, Timberland and Roxy likely to go for their independent operations. Other overseas brands likely to expand on larger scale and invest 5/14/12 Dr. Manoj Kumar 55 more.

Impact on international brands so far not present in India

200 brands likely to enter India in next two years. Brands like IKEA have started strategizing their Indian operations. Only controversial issue-SME sourcing clause.

5/14/12

Dr. Manoj Kumar

66

Impact on Indian brands,

Stiffer competition for quality , price , services etc. Indian consumers perception about the superiority of foreign brands is a challenge. Joint ventures and license arrangements with foreign brands (e.g. Reliance Retails joint ventures or license arrangements with seven 5/14/12 fashion and Dr. Manoj Kumarbrands,77 lifestyle

Impact on Indian shoppers

Wider choices across the category. Lower prices. Better services. World class quality products. Exchangeability phenomenon to grow. New segments of fashion and brand conscious consumers to emerge.
5/14/12 Dr. Manoj Kumar 88

Thank You

5/14/12

Dr. Manoj Kumar

99