Two years after 100% FDI in single-brand retail, Nike to open fully owned Indian units

Nearly two years after India allowed 100 percent foreign direct investment (FDI) in single-brand retail, sports brand Nike is planning to set up a fully owned unit in the country.

The Department of Industrial Policy and Promotion website shows that Nike has filed an application with the regulators on 29 August.

India allowed 100 percent FDI in single-brand retail and 51 percent in multi-brand retail-with riders in September 2012. The decision basically eased the entry of predominantly single-brand US retailers such as Starbucks and Gap into India’s retail market, allowing them to operate without a local partner.

Nike, which competes with the likes of Adidas and Puma, already has stores in India through franchisees. The company entered India about two decades ago and currently operates through around 400 franchised stores in the country.

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However, the approval came with some strict conditions that could be difficult for some companies to meet. Among them was a requirement that single-brand retailers buy 30 percent of the value of their products from small Indian businesses and artisans - defined as businesses and individuals that have invested less than $1 million in factories or equipment.

The rules also said that investors wishing to hold 100 percent of single-brand stores must own the brands that their stores sell, a provision that would preclude franchisers.

According to the filling, Nike now plans to open its own flagship stores.