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ARTICLE · 07 MARCH 2012

"Taking A Retail Business Into India"

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The Indian market is an exciting one with great potential for many foreign retailers.

IndiaCorporate/Commercial Law
Mark Abell
Mark Abell

The Indian market is an exciting one with great potential  for many foreign retailers.  Many of the UK's  High Street  retail brands such as Marks & Spencer, Monsoon and  Hamleys have entered the subcontinent.  However, the retail sector in India is heavily protected from direct foreign investment.  This is especially so for multi brand retailers, despite recent moves to liberalise it.

As a result, for many foreign retailers the most attractive  market entry strategy is one which involves  a third party relationship of some kind.  

Single brand retailers are subject to no restrictions on their ability to hold shares in an Indian company.  Nevertheless experience shows that direct investment into the Indian market is not for the faint hearted or those with capital or resource restraints.  Despite its great commercial promise, India is a hostile environment for foreign retailers who are not "chaperoned" by an Indian partner.  Local operators jealously guard their

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