Govt Considers Raising FDI Ceiling in Single-Brand Retail.

NEW DELHI: Government is considering to increase FDI ceiling for single brand retail. "We are seriously considering to raise the bar further - that means to allow increased FDI....how much it is, only when we take the decision you will get to know," commerce and industry minister Anand Sharma said on Tuesday, on the sidelines of a CII-ET Dialogue Luxury event here.

India allows 51% FDI in single-brand retail sector at present. The government had proposed to expand FDI in the sector to 100% and had placed the proposal before a joint government-industry task force. "You bring in FDI or partnership, surely it will be a game-changer," Sharma added.

As luxury market in India is booming, foreign retail players are bullish on India. The Indian luxury market grew at 20% in 2009-10 as compared to the previous year, and is expected to grow at over 25% in 2011-12. Global luxury brands like Jimmy Choo, Salvatore Ferragamo, Burberry said they are keenly awaiting the raising of FDI cap in single brand retail.

"If we have the possibility to control 100% of the company, of course, the return on investment is more favourable. So we could be keen to invest more in India," said Salvatore Ferragamo chief executive officer Michele Norsa.

"The colours you can see in India is probably more than anywhere else. You visit Varanasi, see the powders (rangoli) and sarees from pink to red. There's no other place you can see this variety. This depicts the style, fashion sense in India," Norsa added.

Global high-end luxury watch-maker Jaeger-Le-Coultre, which plans to set up its subsidiary in India by February next year, too intends to expand its presence and explore smaller cities in due course of time.

"I think India has been inspiring creatives and business people around the world for many years...and honestly in art, in fashion, in all types of creative industries, I don't see a slowing down. I only see that accelerating as India's profile continues to rise on a world scale," said Angela Ahrendts, chief executive, Burberry, a British luxury fashion house.

Source : timesofindia.indiatimes.com