Sara Lee, the US-based $19 billion food, clothing and household products major, is setting up a wholly owned subsidiary that will source, manufacture and export undergarments, casual wear and footwear from the country under different brand names.
The company's proposal to this effect was cleared by Union Finance Minister P Chidambram today.
This will be Sara Lee's third business venture in India. It already has a joint venture with Godrej to manufacture and market insect repellents and air purifiers.
Some of its popular brands include Good Knight mosquito repellents and Hit. Its first 100 per cent subsidiary, Sara Lee Household & Bodycare based in Chennai, manufactures the Kiwi brand of shoe polish and Brylcreem.
Last year, it also entered the innerwear market with its global brand Hanes.
Internationally, apparel and innerwear accounts for nearly $6.6 billion of Sara Lee's revenues and its popular brands include Hanes, Hanes Her Way, Champion, Playtex, and WonderBra.
With textile trade quotas abolished this year several international apparel retailers and brands are increasing their sourcing from India. Sourcing by large international chains like Walmart, GAP, H&M and Target accounts for nearly 50 per cent of India's $12 billion apparel exports.
By 2007, this is expected to go up to $10 billion. China is the largest exporter of garments, including lingerie and innerwear, but several companies like JC Penney have been looking at cutting down their dependence on China and increased sourcing from India.