Industry players said the two companies are in talks with local players for possible joint ventures even as the FIPB on Wednesday allowed four companies to set shop in the country. Along with Fossil Inc, the inter-ministerial panel approved proposals from sports goods major Decathlon and cookware player Le Creuset to set up wholly-owned ventures in India, indicating a bigger commitment from these companies after the government allowed 100% FDI in the single-brand retail segment. Similarly, French fashion brand Promod has been allowed to increase its stake in the Indian venture.
Fossil Inc, which is planning an investment of Rs 22 crore in India, said it will "move as quickly as possible" once it receives formal approval. "India is a key growth market for Fossil... with investment in design, quality and technology, we see tremendous long-term potential for sourcing India-made products for Fossil's global requirements,'' Fossil India MD Vasant Nangia said. Although the combined investment of the four players that got FIPB green light is of the order of Rs 750 crore, coming on the back of the approval to Swedish retailer IKEA's plan to invest over Rs 10,000 crore in setting up stores and back-end infrastructure, the plans would offer significant comfort to the government that is struggling to boost foreign investment flows into the country. IKEA's proposal is, however, yet to get Cabinet nod. British footwear retailer Pavers England, US apparel brand Brooks Brothers and Italian jewellery maker Damiani were among the first off the block when the government cleared their plans to get a larger slice of the India pie.
"The approvals are a good sign and will help increase store rollouts and investments," said Mohit Bahl, partner — transaction services, KPMG India. Industry players said that Coach, the $3-billion accessories giant that competes with Louis Vuitton and Prada, has initiated talks with consulting firms to scout for local partners. Balenciaga is also said to be in early stages of discussions for stitching together a partnership. Emailed queries to both the companies remained unanswered.
What has also helped matters for foreign players is greater clarity on the rules, especially the clause doing away with mandatory 30% local sourcing by single-brand retailers.
The two firms are reportedly in talks with local players for possible JVs even as four companies were allowed to set up shop in India on Wednesday. Along with Fossil Inc, an inter-ministerial panel approved proposals from sports goods major Decathlon and cookware player Le Creuset to ventures.