South African firm Tourvest Holding and Out of India Retail are looking to invest Rs 18 crore to set up duty-free shops at Mumbai airport. Out of India Retail was set up in June this year and is a joint venture formed by Tourvest and Bombay Swadeshi Stores (Bombay Stores) to set up duty-free shops at international airports in India.
In an application filed with the Foreign Investment Promotion Board (FIPB), Tourvest has sought a green signal to move ahead with the joint venture and infuse funds into it.
Tourvest, through its wholly-owned subsidiary, African Tourism Holding, had entered into a memorandum of understanding with Bombay Swadeshi Stores (Bombay Stores) in September 2012 to form a consortium to bid for setting up duty-free shops at Mumbai International Airports Ltd (MIAL). Tourvest has already paid Rs 8 crore to MIAL.
Setting up of duty-free retail shops is not mentioned in the foreign direct investment policy. Since duty-free shops were akin to multi-brand retailing, it was not permitted until 2012. However, duty-free shops were approved as they are, for tax purpose, considered to be in the territory where customs duty has to be paid to carry goods to India.
Mumbai International Airport is a joint venture between a consortium led by GVK Airports, which owns 74 per cent, and the Government-run Airports Authority of India, which holds 26 per cent.
bindu.menon@thehindu.co.in