He is apprehensive of the 30% local sourcing clause which could be a stumbling block to attract new FDI investments in the sector. However he expects a lot of investment to come in the FMCG, food and premium goods segment.
He said, “The electronic media has reported that the government might impose the 30 percent local sourcing clause on a case-to-case basis, which is a bit worrying for me. A lot of global luxury brands are waiting and watching the developments”.
Mr Surya Narayanan – MD of Chennai based – Celebrity Fashions Ltd – a garment exporter and also which manages a clothing brand – Indian Terrain too is apprehensive about the ambiguity in the policy. However he is of the opinion that it will create a lot of employment opportunities.
He expects that it will take between 6-9 months for the first FDI investment to come in, except in the case of Wal-Mart which already is in a JV with the Bharati Group in India.
Other experts, fibre2fashion spoke to and who did not want to be named said that the actual impact of the decision will take at least 3-4 years to trickle in as it cannot be expected that global retailers will make a beeline, as a good amount of FDI will be spread over a period of 3-4 years.
Fibre2fashion News Desk - India
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