Coming: FDI in high-end retail

India may soon allow foreign direct investments (FDI) in retail luxury goods, Union Commerce Minister Kamal Nath said on Friday.

Inaugurating the Hindustan Times Luxury Summit in Mumbai, the minister said, "We are now looking at formulating a policy that does not displace or disturb the small retailers and neighbourhood stores."

Nath said the government was of the view that retail should not replace or displace the small enterprises, 98 per cent of which are in unorganised sector.

"We are looking at the correct definition by which it could be facilitated without disturbing the existing retail outlets of small enterprises," he said.

"Luxury brands do not pose any such threats to the neighbourhood stores," he assured.

"You will not have to wait long for this to happen, he said when asked about FDI in retail of high-end products.

The Minister said the very fact that there is a large market and demand for high-end products shows the success of economic growth in India.

"Our model of reforms is a revival of the weakest and not survival of the fittest," he said.

"The bedrock of our reform process was all-inclusive. It has helped us tide over all challenges and crisis," he added.

India's first style summit opened in the backdrop of top international brands.

Speakers from the house of Gucci, Oberoi, Kenzo, Jimmy Choo, Altagamma and Villa Moda will share their knowledge and experiences, and discuss India's future as a world-class supply base for luxury houses and as a consumer of luxury goods.

Congratulating the Hindustan Times Media Group to capture 'this paradigm shift that's taking place in India', the minister noted, "To me this conference is about investment and employment, about a huge growth opportunity for the country."

Talking of the success of India as an economic power, the minister said, "We have many times in the past faced a question: Is it worth to be in India? But this is not the question today. Can you afford to be not in India today."

Stating that the country has already seen democratization of brands, the minister said, "You could have a high-end Nokia phone whereas somebody else could have a low-end Nokia phone; but both have access to Nokia."

He said, "The high potential of the Indian market has already compelled International companies to adapt to the local market. We now have a McDonald serving Aloo Tikki in India."

Speaking on the occasion, HT Media Ltd Vice Chairperson Shobhana Bhartia said, "Luxury and India have long been inextricably linked."

But, "I find it sad that few Indian brands and products have made a mark at the international level," she observed.

Wondering as to whether India can become more than a hub for the luxury products, she asserted, "Don't just look at us as a market but teach us how to market us."

FICCI chief SK Poddar commented, "Who would have imagined five years ago that a product of Louis Vitton priced at Rs two lakh would be sold out even before it even reached the stores in India.

We need a clear policy that can facilitate retailing of products. We need to allow FDI in high end retailing of Luxury products. This is a timely initiative," he added.