The Indian government is mulling some significant relaxation in the foreign direct investment (FDI) policy for single-brand retail trading, even as it gets a series of applications from international retailers that are forcing it to give a serious relook at the policy.
First, the government is planning to relax the clause that the foreign investor should also be the owner of the brand. Officials have told Business Standard that during several discussions with foreign retailers, the government finds there are brands planning to foray into India in a big away, not with the same brand under which they operate internationally but some other which it finds a fit for the Indian market.
Recently, the Foreign Investment Promotion Board under the ministry of finance rejected a proposal by Zara Holdings Netherlands for bringing the Massimo Dutti brand chain in India. The rejection was based on this same clause: Zara Holdings was not the majority shareholder in Massimo Dutti, the main owner of the brand being a Spanish retail chain, Inditex.
(Source: Business Standard )