Fashion chain H&M will become the second Swedish retailer to set shops in India after DIY furniture-chain Ikea outlined plans to open 25 stores across major Indian cities.
India’s foreign investment body, FIPB (Foreign Investment Promotion Board) gave its nod to H&M earlier this week, reports quote Indian government’s statement.
The move comes just under a year after the current UPA-led coalition government approved single-brand foreign retailers to own 100% of their retail operations in India. It was part of the radical FDI reforms the government announced in order to give its ailing economy a boost. While single-brand retailers such as H&M are allowed 100% FDI investment in India, multi-brand retailers or supermarkets are allowed only 51% FDI.
H&M, the fast-fashion retailer is the second largest global clothing retailer after Spanish Chain Zara and ahead of US chain Gap. It plans to run wholly-owned locally operated shops in India selling own-label clothes to capture the growing urban appetite for fashion retail from men, women, teenagers and children. India is the third largest economy in Asia and is seen as an opportunity by foreign retailers to increase their growth and income.
The retailer has over 2,600 stores worldwide and its third quarter profits after tax for this year was 4.4bn Swedish kronor (£430m), up 22% from last year.
Other clothing retailer including Marks and Spencer (M&S) and Zara already operate stores in India.Follow Archana Venkatraman on Google+