H&M may enter India through local partner

Swedish fashion giant Hennes & Mauritz (H&M), which was

looking at solo-India entry after the government announced 100 per cent FDI in single brand retail, has now changed its plans. H&M, the second-largest European apparel maker is now scouting for an able Indian partner to enter the country.

As per earlier reports on H&M’s India entry, the company was taking a cautious approach to entering India. Like many other global players, the Swedish retailer too was keenly studying the norms put forth by the government while approving up to 100 per cent FDI in single brand retail. Riders like mandatory 30 per cent local sourcing from SMEs with revenues not exceeding Rs 5 crore has been a major cause of concern for these giants.

H&M operates around 2, 500 stores across 43 countries posting revenues of 128.8 billion kronor (around $19 billion/Rs 1,05,374 crores). Though the government is keen on boosting domestic manufacturing, the global majors are sceptical and are not actively speeding up to enter the market on their own.

While H&M already sources finished goods from the around Rs 2,200-crores Bombay Rayon and Rs 1,100 crores Gokaldas Exports, the size of manufacturers (Rs 5 crore) that these companies are now expected to work with was considered a major hurdle to their entry.