World’s second largest clothing retailer H&M to enter India


Feb 19, 2013: Close on the heels of Swedish company Ikea getting its proposal of investing Rs.10,000 crore in India cleared, it’s now the turn of world’s second largest clothing retailer Hennes & Mauritz to enter into India. Popularly known as H&M, the company has been seriously looking into the Indian market following the success of retail chains like Marks & Spencer and Zara. India has off late been a booming market for fashion clothing paving the way for many multinational brands to enter into the retail space. With the government of India allowing 100 per cent FDI in single brand retail companies like H&M has got more clarity on FDI and domestic sourcing norms as well.

According to sources, H&M will be moving a formal proposal in this regard after getting clarity n local sourcing requirements. A meeting of CEO of H&M and the Commerce and Industry Minister is scheduled in this regard. One of the major challenges that H&M would be facing in India is regarding domestic sourcing. The new FDI norms calls for multinational retail chains to source 30 per cent of their inputs from small and medium companies.

Though the government has made some changes and allowed the retail chains to source from big domestic companies as well, some clarity in this regard is needed. It remains to be seen how H&M takes it on in the Indian market on its own and compete with companies like Inditex, the world’s largest clothing retailer which has set up its Zara stores in association with Trent, a subsidiary of Tata under a 51:49 joint venture.


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