FIPB to hear Massimo Dutti’s FDI proposal next week

After Zara’s success in India, Inditex Group

had sought permission to open stores of its fashion brand Massimo Dutti in India. After rejecting the application last year, the Foreign Investment Promotion Board (FIPB) now plans to assess proposal from the group once again early next week.

In 2009, Inditex had announced a joint venture with Tata run Trent to launch Massimo Dutti in India. However, when it applied for permission to open stores in India, FIPB cited that the application was made by Zara Holdings Netherlands, instead of Spanish retail chain, Inditex, which was a violation of a rule framed by the Department of Industrial Policy & Promotion (DIPP) that says an investor must own the brand it plans to launch in the country.

Massimo Dutti seeks to invest 1.5 million euros (about Rs 10 crores) over two years to open five Massimo Dutti stores in India through a 51:49 joint venture with the Tata Group.

Inditex operates more than 6,000 stores in 86 countries across eight formats including Zara, Massimo Dutti, Pull & Bear and Uterque. Despite the global slowdown the fashion retailer clocked 16 percent year-on-year jump in its net sales for fiscal year 2012 at 16 billion euros (Rs 8,69,200 crores) and 22 percent rise in net profit of 2.4 billion euros (about Rs 13,000 crores).