Budget 2018: Despite 100% FDI in retail, existing players want sweeter deal

New entrants, including international fashion brands and white goods appliance companies, are likely to find the 100 per cent foreign direct investment (FDI) in single-brand retail via automatic route an incentive to enter India. However, existing players hope the government would bring some further changes in the upcoming Budget to sweeten the deal for them as well.

Till now, single brand retailers had to source 30 per cent locally, but the new FDI rules allow them to count sourcing for its global operations as well during the initial five years.

“We are happy to hear about the local sourcing requirement being offset towards H&M’s global sourcing from India. While it is in the right direction, we look forward to the same relaxation in the period beyond the initial five years as well, in view of ease of doing business,” Janne Einola, Country Manager H&M India, said.

Major global retail players, who have been in India for long, hope the government would also bring in some changes in regulations to help them out. From industry status for retail sector to stricter implementation of the Model Shops and Establishments Act, 2016, retail players hope the government would change policies to aid the sector.
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