Indian Retail Market More Lucrative After Relaxed FDI Norms

As the government relaxed the 30 per cent local-sourcing norm in single-brand retail, market experts welcomed the move and said the foreign retailers will now find Indian market more lucrative to invest and conduct business in, which will create more job opportunities.

Shobhit Agarwal, MD and CEO, Anarock Capital, said the government was on a roll and was making concerted efforts to bring India’s economic growth back on track. 

“This is excellent news for foreign retailers giants like IKEA and Apple who will now find Indian market more lucrative to invest and conduct business in. Many foreign brands have been in a wait-and-watch mode on account of the difficulties so far perceived in meeting the mandated sourcing norms. With more clarity, many of such players can now make their foray into India to tap into India’s consumption story - and to boost investments here,” he said. 

Agarwal added that the announcement to allow single-brand retailers to start online sales, effectively doing away with the previous condition of first setting up a mandatory brick-and-mortar store, was also commendable. 

“Massive capital is required for setting up a physical store vis-à-vis online platforms. Now retailers can start online sales without having to open physical stores. This will significantly ease capital pressure on small retailers who are looking to start afresh,” he said.

Anshuman Magazine, Chairman and CEO (India, South East Asia, Middle East and Africa), CBRE, said the “positive changes” in the policy will position India as an attractive investment destination for global retailers, opening more job opportunities in the sector while simultaneously augmenting indigenous manufacturing and exports. 

“The relaxation in sourcing norms for single brand retailers and allowance to set up e-commerce operations before setting up physical stores will not only benefit domestic exporters of India-made goods but would also provide greater flexibility and ease of operations for retail players. Simplification of the FDI norms will also open doors for multiple employment opportunities at various levels of the manufacturing lifecycle. This is a welcome move considering the fact that foreign investment is immensely crucial for the country which is looking to double its economy to 5 trillion dollars over the next five years,” he said.