Retail

Foreign Direct Investment in India’s Single and Multi-Brand Retail

New opportunities and developments lie in store for foreign retailers

By Chris Devonshire-Ellis and Ankit Shrivastava, Dezan Shira & Associates

Feb. 2 – As India has liberalized its single brand retail industry to permit 100 percent foreign investment, we take a look at the regulatory issues and legal structures pertinent to establishing operations in this new dynamic market. That India should be well on the radar for foreign retailers was recently supported by A.T. Kearney, whose 2011 Global Retail Development Index ranks the nation as fourth globally.

India’s retail industry is estimated to be worth approximately US$411.28 billion and is still growing, expected to reach US$804.06 billion in 2015. As part of the economic liberalization process set in place by the Industrial Policy of 1991, the Indian government has opened the retail sector to FDI slowly through a series of steps: Continue reading →

Posted in Business, FDI and Foreign Trade, Featured, Legal and Regulatory, Markets, Retail | Tagged Adidas, Carrefour, India Cold Storage, India Consumers, India FDI, India Multi-brand Retail, India Retail, India Single-brand Retail, India Supply Chains, Nike, Walmart | Leave a comment

India Allows 100% FDI in Single Brand Retail

Jan. 11 – The Indian government on Tuesday agreed to allow 100 percent foreign ownership in single brand retail stores, paving the way for international businesses such as Starbucks, Ikea and Adidas to operate independently in the country without having to involve local partners. Foreign single brand retailers were previously limited to 51 percent ownership.

Besides the entrance of new companies into the Indian market, the decision is also likely to result in several existing foreign players operating under tie-ups with Indian companies to convert their existing ventures into wholly-owned subsidiaries. Continue reading →

Posted in Business, FDI and Foreign Trade, Featured, Legal and Regulatory, Regulatory Update, Retail | Tagged India Multi-brand Retail, India Retail, India Single-brand Retail | Leave a comment

Indian Businesses Active in Foreign Cooperation

Mar. 31 – Indian businesses have been busy recently signing new cooperations with foreign companies across the world. Here we provide a summary of some of the most important deals Indian companies have signed across several industries.

Ashok Leyland and Nissan unveil first LCV
India’s second largest heavy commercial vehicle manufacturer Ashok Leyland rolled out its first light commercial vehicle (LCV) Dost together with its partner, the Japan-headquartered automaker Nissan. As the current joint venture between the two companies covers cooperation in manufacturing, technology and power train for LCV production, in the future the two parties will likely expand their JV to include van design and development. Continue reading →

Posted in Automotive, Business, Chemical & Pharmaceutical, FDI and Foreign Trade, Retail | 1 Comment

Two Gov’t Departments Warn Against Opening Up Retail to FDI

Nov. 10 – Two government departments are warning against opening up multi-brand retail to foreign direct investment in an effort to slow momentum towards opening the sector following U.S. President Barack Obama’s visit to the country.

According to the Ministry of Micro, Small and Medium Enterprises, the government should not allow more than 18 percent FDI in multi-brand retail while the Ministry of Communications and Information Technology believes that opening up of the sector would have an adverse impact on manufacturers of electronics. Continue reading →

Posted in Economy and Politics, Legal and Regulatory, Retail | Leave a comment

Special Economic Zone Incentives to Continue Until 2014

Aug. 30 – Special economic zone incentives will be exempted from the new direct tax code (DTC) until 2014 although there is a proposed 20 percent minimum alternative tax based on a version approved by the Cabinet last Thursday.

Despite the assurance, investors are still nervous about the changes and developers are unsure whether zones will attract enough investors despite the changes made to the DTC. The bill may still undergo revisions when it reaches Parliament for approval.

Continue reading →

Posted in Economy and Politics, FDI and Foreign Trade, Finance, Tax and Accounting, Legal and Regulatory, Location, Retail, Shipping & Logistics | Leave a comment

India’s Consumer Affairs Ministry Recommends 49 Percent FDI in Multi-Retail

Aug. 27 – India’s Consumer Affairs Ministry is recommending that 49 percent foreign direct investment be allowed in the multi-retail industry with an emphasis on developing back-end operations.

The ministry said that more foreign investment should be allowed on the condition that a model law be in place to help shield small businesses. Moreover, the majority of foreign investment in multi-brand retail should focus on improving back-end infrastructure, in addition to agricultural processing and logistics. Continue reading →

Posted in Economy and Politics, FDI and Foreign Trade, Legal and Regulatory, Location, Retail | Leave a comment

Proposal Suggests FDI in Multi-Brand Retail by 2015

Aug. 19 – One of India’s top ranking business schools said in a report that the government should give local businesses five years to develop before opening multi-brand retail to foreign direct investment.

The report made by Birla Institute of Management Technology (BIMTECH) said “…a breathing space of five years till 2015 should be given to the unorganized retail sector so as to enable this crucial sector to re-orient its strategy and be competent to face competition from foreign investment.” Continue reading →

Posted in Economy and Politics, FDI and Foreign Trade, Legal and Regulatory, Location, Retail | Leave a comment

India Considers Opening the Private Banking Sector

Aug. 12 – The Reserve Bank of India has released a discussion paper that talks about possibly opening the private banking sector to new players.

“The RBI clearly expresses its intent to expand the banking reach in the country while focusing on maintaining financial stability,” said CII director-general Chandrajit Banerjee. This will make bank capital requirements and intent now open to other competition. Continue reading →