Pavers England gets DIPP nod to launch wholly-owned retail stores
"The DIPP is satisfied with the proposal and it will now be placed before the FIPB for its sanction," an official told ET.
With the government tweaking its single-brand retail policy earlier this month, it has become easier for foreign companies to comply with norms, the official added.
Pavers was the first foreign retailer to apply after the government in January notified its decision to raise the foreign direct investment limit in single-brand retail from 51% to 100%.
Swedish furniture maker IKEA, too, filed its final documents for investing 100% in single-brand retail stores on Monday, following a dilution in the sourcing norm. Earlier, the company was facing problems adhering to the 30% domestic sourcing norm.
Approval in the case of Pavers had been delayed because of confusion over ownership of the brand, as the application for FDI was made by Pavers Foresight Smart Ventures, a $60-million equal joint venture between Pavers and the Foresight Group based in Mauritius.
The company proposed to invest $20 million in Pavers, which currently retails its products in India through a master franchise.
"Pavers has carried out all the paperwork to transfer the brand to the Mauritius joint venture. Now that the ownership of brand clause has also been relaxed for foreign retailers in the revised policy, there is no problem at all," the official said.
The DIPP vets FDI proposals to ensure that they meet policy parameters. It then forwards it to the FIPB with comments. The government has relaxed the ownership clause for FDI in single-brand retail, a move that will help fast track pending applications of brands such as Massimo Dutti and Promod. Earlier, it was necessary for the investor company to also own the brand.
As per the changed policy, any foreign investor, whether owner or not, will be allowed in single-brand retail as long as there is a valid franchisee agreement with the brand owner.