Global retail brands - Louis Vuitton and Lladro - have received the nod from the commerce & industry ministry to set up shop in India.
The two single brand retail applications comes close on the heels of approval given to Moja Shoes by the Foreign Investment Promotion Board (FIPB) recently. The approval for these single retail brand applications comes even as the Left parties objected to foreign retail investments in India.
"While Moja Shoes has been allowed to set up its chain in India, the commerce & industry ministry recently cleared proposals of LVMH (Louis Vuitton Moet Hennesey) and Lladro under the single-brand retail category. These cases will be forwarded to FIPB now," a senior official told ET. Once the FIPB nod comes through, they can set up their own stores.
The commerce & industry ministry's nod is required only in the case of FDI applications in single brand retail chain. While the FIPB provides for single-window clearance for foreign investors, applications for retail trade are required to be submitted in the nodal department - Department of Industrial Policy & Promotion (DIPP).
The Press Note 3 of '06 states that applications in this area would be processed by the DIPP to determine whether the products proposed to be sold satisfy the notified guidelines, before being considered by the FIPB for government approval. Even as the DIPP has given a green signal, proposals may face some political resistance.
The government had allowed 51% FDI in single-brands in November last year and had initiated discussions in various quarters to evolve a model for multi-brand.
While FDI in single brand may be here to stay, the government is unlikely to take a call on FDI in multi-brand retail or food retail in near future with the Left all set to oppose it tooth and nail.