The government on Friday gave permission to British footwear retailer Pavers England, US-based clothing company Brooks Brothers and Italian jeweller brand Damiani to set up stores in India under the single brand retail policy.
The Foreign Invstment Promotion Board (FIPB) also allowed construction and engineering major Larsen & Toubro to induct foreign investment in its defence production venture. The FIPB, the apex body for clearing foreign investment proposals, gave its go ahead to Pavers at its meeting chaired by Arvind Mayaram, secretary, department of economic affairs.The three retail ventures are expected to bring in FDI worth over Rs 106 crore. “It has been cleared,” Mayaram said after the meeting.
Pavers’ intends to set up 100% -owned subsidiary and is the first company to apply and receive nod under the new regime for single-brand retail sector that permits foreign direct investment upto 100% in a retail venture but with conditions such as mandatory 30% domestic sourcing from India. The FIPB has allowed Brooks Brothers to invest Rs 6.22 crore in its recently announced 51:49 joint venture with Reliance Brands, a unit of Reliance Industries, and Italy’s Damiani to set up a 51:49 joint venture with Mehta’s Pvt Ltd, a finance ministry official said. At present, Pavers sells products through its Chennai-based master franchisee Triton Retail in 28 exclusive stores across India and also through retail outlets of Reliance Footprint, Lifestyle, Shoppers Stop and Westside.
The government had revamped its single-brand retail policy in September making it easier for foreign retailers to comply with domestic sourcing norms. Pavers was the first foreign retailer to apply after the government in January notified its decision to raise FDI limit in single-brand retail from 51% to 100%. But, the proposal was delayed as the earlier norms allowed only the brand owner to set up shop in India. Under the new rules, the brand owner can licence out the brand to one single entity for opening stores in India.
Pavers’ application was made by Pavers Foresight Smart Ventures, a $60-million equal joint venture between Pavers and the Foresight Group based in Mauritius.
News source: Economic Times