DIPP to rework ‘single-brand’ definition, to allow sub-brands

Latest media reports suggest the Department of Industrial

Policy and Promotion (DIPP) has decided to allow single-brand retailers to also sell their sub-brands in India. Recently, UK-based retailer Marks & Spencer (M&S) was under the scanner for a possible violation of FDI policy in single-brand retail that bars investors from selling multiple brands in a single store. The finance ministry had raised the matter with the DIPP and sought to know if M&S' practice of selling sub-brands was in conformity with the FDI policy.

Keeping the dilemma of foreign retailers like H&M, M&S, Zara and other foreign fashion retailers in mind, the DIPP would rework the definition of 'single brand' to enable such retailers to continue selling their sub-brands and stay within the ambit of foreign direct investment regulations in single-brand retailing. As per the existing policy framework, products to be sold should be of a 'single brand' only, implying that multiple brands owned by the same firm can neither be sold under one roof nor sold by the same entity. But the policy is not clear on sub-brands and labels.

Spanish clothing company Inditex sells the Zara brand in partnership with Tata Group's Trent in India. However, Zara's products are branded as Zara Man, Zara Woman and TRF, the more causal line of clothing. Similarly, Inditex-owned Massimo Dutti also has different brands of products for men and women, although both brands include the mother-brand's name in the prefix. M&S offers most of its sub-brands, such as Limited Collection, Autograph, Collezione, North Coast, Blue Harbour, Savile Row Inspired, Indigo Collection and Per Una, in its stores across the country. Italian clothing brand Diesel also sells its sub-brand 55DSL in its shops in India.