Hennes & Mauritz to skip India foray
31 January 2012: The world’s second largest apparel retailer Hennes & Mauritz (H&M), which usually enters large markets on its own, is not so sure about opening shop in India despite finding the market interesting. Earlier this month, India relaxed laws allowing foreign retailers to wholly own their businesses with the rider that they source 30% of their products from SMEs with revenues not exceeding Rs 5 crore. Until then, foreign investment was limited to 51% or retailers were forced to franchise.
But the Swedish retailer is not entirely convinced by the norms which make it mandatory for the foreign retailer to source from small and medium industries in India. The Stockholm headquartered chain operates around 2, 500 stores across 43 countries posting revenues of around $19 billion (approx Rs. 93,851 crore) Another Swedish giant Ikea, which too was keen on entering the Indian market with 100% control of operations, has been non-committal. It is still studying the guidelines -- the SME sourcing being a contentious issue.
Source: Economic Times
|
