April 17, 2007 – NAVI MUMBAI, India — Apparel Retailing in India: Opportunities for Foreign Firms
India is well known as a competitive manufacturer of apparel. Many foreign companies have been sourcing large quantities of garments regularly from India for a number of years. But less well known is the fact that India has huge potential as a market for foreign clothing, given its large population and growing household incomes. A few significant foreign players—such as Levi Strauss, Benetton and Lacoste—have been selling their branded apparel in India for a number of years. But most foreign companies have yet to enter the Indian market.
Under government liberalisation policies, there has been a sharp increase in the availability and variety of Indian and foreign branded consumer goods on the market. Department stores have been expanding, franchising has grown in popularity, and malls have proliferated. But in 1997 the government banned foreign direct investment (FDI) in the Indian retailing sector, which means that direct foreign involvement in retailing remains restricted to franchising.
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