Skech­ers, Kiko get Nod for Sin­gle Brand Re­tail

DIPP has taken over clear­ances from the FIPB for fast-track­ing of all such FDI pro­pos­als

The Economic Times - - Economy: Macro, Micro & More -

Ruchika Chi­tra­van­shi & Deepshikha Sikar­war

New Delhi: In a big push to for­eign di­rect in­vest­ment in sin­gle-brand re­tail, footwear maker Skech­ers USA Inc. and Ital­ian cos­metic brand Kiko have se­cured the govern­ment’s ap­proval to open out­lets in the coun­try.

Pro­pos­als of Nike, the world’s big­gest maker of sports goods, and Ger­many’s Puma have re­ceived the Depart­ment of In­dus­trial Pol­icy and Pro­mo­tion’s con­sent and have been sent to the fi­nance min­istry for fi­nal clear­ances.

To fast-track sin­gle-brand re­tail pro­pos­als, DIPP now ex­am­ines all ap­pli­ca­tions and for­wards them to the Depart­ment of Eco­nomic Affairs for the fi­nance min­is­ter’s nod. The For­eign In­vest­ment Pro­mo­tion Board does not scru­ti­nise these pro­pos­als. In­dia al­lows up to 49% of for­eign di­rect in­vest­ment in sin­gle-brand re­tail­ing un­der au­to­matic route and ap­proval has to be taken for higher lev­els. Com­pa­nies are re­quired to com­ply with a 30% do­mes­tic sourc­ing norm for in­vest­ments ex­ceed­ing 51%.

Ap­proval for Skech­ers and Kiko comes al­most nine months af­ter they filed ap­pli­ca­tions to open their stores. The com­pa­nies will also be al­lowed to sell their prod­ucts di­rectly on­line af­ter open­ing their brick-and-mor­tar stores.

Skech­ers, a $3 bil­lion com­pany head­quar­tered in Man­hat­tan Beach, Cal­i­for­nia, has a pres­ence in more than 160 coun­tries. Kiko Mi­lano will sell its cos­met­ics and beauty and skin care prod­ucts.

A pro­posal from Ital­ian lux­ury ap­parel com­pany Grotto, which owns brands such as Gas Jeans, has been re­ferred back to the DIPP by the eco­nomic affairs depart­ment, which sought clar­i­fi­ca­tions on the com­pany’s ap­pli­ca­tion seek­ing changes to en­sure com­pli­ance with the For­eign Exchange Man­age­ment Act.

The govern­ment re­laxed FDI rules for sin­gle-brand re­tail­ing in Novem­ber and al­lowed com­pa­nies to sell through whole­sale, re­tail and ecom­merce chan­nels.

“It has been de­cided that an en­tity which has been granted per­mis­sion to un­der­take SBRT (sin­gle brand re­tail trad­ing) will be per­mit­ted to un­der­take ecom­merce ac­tiv­i­ties,” DIPP said.

FDI in­flows into the coun­try increased 37% to $39.32 bil­lion in 2015. For the year 2015-16 up to Jan­uary, the DIPP re­ceived 424 FDI pro­pos­als, of which 285 worth .₹ 48,000 crore were dis­posed of.

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