Single brand retail FDI policy a flop, only one applicant so far.

 New Delhi: Slowdown in government’s policy initiatives and the corresponding weak market response is evident from the fact that despite allowing upto 100% foreign direct investment (FDI) in single brand retail, so far only one applicant wants to avail the benefit. Also, no decision has been taken by the government on allowing 49% FDI in Indian carriers by foreign airlines while there is no forward movement on increasing FDI in defence from 26% to 49% or allowing FDI in multi-brand retail.

Despite big hoopla around allowing FDI in single brand retail, so far only one UK-based footwear brand Pavers has applied to the government to scale up its India operation in line with the new FDI rule for single brand retail. “There is one proposal from Pavers India who have applied for a licence,” said Saurabh Chandra, secretary department of industrial policy and promotion (DIPP) on the sidelines of a Ficci function.

Chandra said the decision to allow foreign airlines to pick up equity in domestic carriers will be taken by the Cabinet. “Process of consultation is on...we hope to get it soon. Consultation is also on for multi-brand retail while status-quo remains on hiking FDI cap in defence,” Chandra said.

The government had eased the FDI policy for single brand retail in November 2011 which was notified in January this year. However, only Pavers India has applied. Pavers entered India in 2008 via a joint venture with Chennai-based Forward Shoes, a footwear exporter. Pavers India Footprint, was set up to manufacture shoes. Pavers India, however, retails its products through a master franchisee Trident Retail and also through Reliance Footprint and Lifestyle retail outlets.

Source : financialexpress.com