Get a demo Do I subscribe? News sign-up
Print

Foreign brands eye India

News, 22 June 2016

NEW DELHI: International brands, from retailer to tech, are expected to look anew at their approach to India following the government's easing of the rules surrounding foreign direct investment (FDI).

On Monday, the government announced it was permitting 100% FDI in food retail, including e-commerce, with the proviso that products are produced, processed or manufactured in the country, the Economic Times reported.

The decision opens the possibility of the likes of Wal-Mart and Amazon renewing their US rivalry in India. The former currently operates a cash-and-carry business while the latter favours an online marketplace where it hosts third-party sellers.

Amazon is interested in sourcing and selling grocery, fruit and vegetables online through its marketplace, according to a person familiar with the company's plans.

"It works with farmers in the US under a programme called Amazon Fresh and would like to replicate the model in India," he added.

A Wal-Mart India spokesperson welcomed the "progressive decision" and said the "far-reaching reform will benefit farmers, give impetus to food processing industry and create vast employment opportunities".

At the same time, the government relaxed local sourcing rules for foreign brands wanting to set up their own stores, which could pave the way for Apple to enter the market.

The new dispensation means that "cutting-edge" tech businesses will not have to comply with the 30% local sourcing regulations for up to eight years. Almost all of Apple's devices are made in China.

When Tim Cook, Apple CEO, visited India recently he said that company-owned stores were vital for the company's long-term plans as these would set new benchmarks in terms of sales and service.

Data sourced from Economic Times; additional content by Warc staff