After waiting for seven months, Swedish clothing retailer Hennes & Mauritz AB has finally got the Foreign Investment Promotion Board’s (FIPB) approval to invest Rs 720 crore in India.
Lack of clarity on mandatory sourcing norms as to what could be considered part of domestic sourcing was one of the reasons for the delay.
Last month, the company sorted out the problem with the Department of Industrial Policy & Promotion.
H&M, which wants to open stores across India, had applied to the DIPP in April this year for entering single-brand retail.
India allows 100 per cent FDI in single-brand retail. Foreign investors, however, are required to source 30 per cent of their inputs domestically.
H&M, which retails high-end fashion garments, is the second Swedish company, after IKEA, to get permission to invest in single-brand retail in the country.
Although H&M is yet to disclose its plans on where it would be opening its first few stores, there have been reports of the company planning to open six stores in Delhi and neighbouring areas.
The FIPB, headed by Department of Economic Affairs Secretary Arvind Mayaram, cleared 14 FDI proposals out of 23 on the agenda, a Government official said. This includes Swiss building materials major Holcim’s proposal to merge its holding firm Holcim India with its unit Ambuja Cements as part of the plan to restructure its India operations.
Telecom major Vodafone’s proposal to acquire 100 per cent stake in its Indian arm was not taken up in the meeting as all the Ministries and Departments concerned had not given their comments.