The Government might soon hike the 51 per cent limit on Foreign Direct Investment (FDI) in single-brand retail business, Commerce and Industry Minister, Mr Anand Sharma, indicated here today.
“We are seriously considering raising the bar further,” he said at a ‘CII Luxury Brands' conclave.
He, however, did not divulge by how much the limit would be raised and whether the Government would go the whole hog. There have been a lot of reports of late that India might allow 100 per cent FDI in single brand retail.
CEOs of three fast growing luxury brands - Burberry, Jimmy Choo and Ferragamo - present at the summit, expressed happiness at the Minister's statement. But they also voiced their reservations about India's luxury retailing infrastructure compared to China.
Mr Michele Norsa, CEO, Salvatore Ferragamo, pointed out that China has become luxury's new geography with its ritzy malls and fancy retail spaces in swanky hotels and airports. “The luxury environment in India, by contrast, is not so easy to find,” he said. He also said that taxes on luxury products in China were half that of India.
Mr Jimmy Choo CEO, Mr Joshua Schulman, also said India's infrastructure for luxury retail was lagging behind demand. According to a CII AT Kearney report released during the conclave, the Indian luxury market grew 20 per cent over the past year and is worth $5.75 billion. Jewellery, electronics, cars and fine dining have grown the fastest over the past year. However, growth in high-end real estate and yachts has remained flat.