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Global brands await India nod to enter retail

Mumbai, Aug 13 (Truth Dive): Apparel maker Tommy Hillfiger, clothing retailer Brooks Brother Group, Italian jewelry brand Damiani International, French fashion brand Promod SAS, Fapa Company Ltd and NA Pali Europe SARL, which is a unit of sport wear retailer Quiksilver Inc have applied for 51% ownership in single brand retailing.

Many of these brands are already present in India through licensing and joint-venture partnerships with Indian retailers. The government has not taken a decision on these requests, the ministry said in a statement.

Foreign Investment Promotion Board (FIPB) recently rejected an application by Zara owner Inditex S.A. to sell a more upscale brand through a joint venture with Tata Group’s retail arm, Trent Ltd.

India’s condition that foreign single-brand retailers to set up wholly owned operations in India should source 30 percent from small local firms has discouraged retailers from applying for full ownership.

Hoping to bank in on rising middle-class fondness for an expanding appetite for global brands and lifestyles, only Ikea and Pavers, a British shoe chain, have applied so far.

A widely expected move from the government as it struggles to attract overseas investors in the sector is a decision to be taken on modifying the sourcing norms.

In a related move and in a long-term bet on growing healthcare spending in the country, the private equity arm of Goldman Sachs and American venture capital fund New Enterprise Associates (NEA) jointly invested about $54 million in Nova an Indian healthcare firm.

According to data from VCCircle.com, a private equity and M&A data provider private equity investments in India’s healthcare sector rose 2.5 times to $630 million in the first half of this year from $181 million during the same period last year. This data shows investment highlights the lure of the Indian healthcare sector despite the worries that global buyout firms have about investing in India.

Despite returns on funds raised in dollars have come down with the rupee’s record lows, compounding the effects of a weak stock market, health care in India is attractive.