India will witness about 10 foreign single-brand retailers starting operations after Prime Minister Narendra Modi removed the need for a federal approval, a senior minister said.
The companies which have sought government permission to set up single-brand establishments include Fast Retailing Co., operator of Japanese casual-wear brand Uniqlo. It had submitted an application in November last year. Tesla Inc. is also in talks with the government to enter India through the single-brand retail route, The Times of India reported last year.
Faced with the slowest growth since 2014, Modi has been pitching India to foreign investors including those at the World Economic Forum Tuesday, where he said the economy will be worth $5 trillion by 2025. His government has made it easier for foreign investment in several sectors, including real estate brokerages and power exchanges apart from retail. He allowed overseas airlines to invest in state carrier Air India Ltd.
Apart from lifting the need for an approval, the rule mandating 30 per cent local sourcing has also been relaxed for the first five years for companies investing under single-brand retail trading.
Easier Rules
Relaxed rules have given a push to foreign direct investment inflows into India, which rose 17 percent in April-September to $21 billion from a year ago, according to data from the commerce ministry. The government has now embarked on Make in India 2.0 to achieve its goal of $1 trillion manufacturing GDP by 2025.
“We are in the process of identifying futuristic sectors such as electric storage, genomics, robotics and will be developing strategic goals to facilitate manufacturing under these,” Prabhu said.
On Apple Inc.’s proposal for manufacturing iPhones in the South Asian nation, the minister said that the company’s application entails a demand that is beyond the scope of the current rules and “is being looked into”.
Apple had earlier sought a slew of sops including customs duty exemption to start manufacturing. However, the demand has been turned down by the finance ministry.