What We’re Reading: “Abercrombie, Gap may plan shops in India”
Kegler Brown Global Business News January 25, 2012
“Abercrombie, Gap may plan shops in India” | Business Standard Ltd.
The notification issued by the Government of India earlier this month for allowing up to 100% foreign direct investment (FDI) in single brand retail puts a condition of 30% sourcing from local small and medium enterprises, in case of foreign investment exceeding 51%.
The 30% sourcing clause is likely to pose hurdles for foreign apparel retailers wanting to enter the Indian market. However, several well-known U.S. single retail brands will be eager to open their outlets in India on their own. Some global retailers who are already present in India may now look forward to increase their share in the Indian market. The relaxation of the FDI cap in the single-brand retail sector will lead to attraction of investment and technology tie-ups from global retail firms.