Levi Strauss seeks approval for direct retailing in India

14 April 2016 (Last Updated April 14th, 2016 18:30)

US-based apparel maker Levi Strauss & Co plans to transform its existing wholesale units in India into retail outlets.

US-based apparel maker Levi Strauss & Co plans to transform its existing wholesale units in India into retail outlets.

It has sought approval of the Indian Government, thereby becoming the latest overseas brand planning to gain from the changes in foreign direct investment policy in retail.

Several other overseas brands that had sought approval to operate into direct retailing include Pepe Jeans, Adidas and Puma.

On 11 April, Levi Strauss & Co filed an application seeking permission from India's Department of Industrial Policy and Promotion, which operates under the Union Ministry of Industry.

"It has been decided that a manufacturer will be permitted to sell its product through wholesale and/or retail."

If the manufacturer gains approval, it will be able to get into direct retailing.

Last November, the government had relaxed the FDI norms for retail, which now enables manufacturers to get into direct retailing and the e-commerce market.

The DIPP had then stated: "It has been decided that a manufacturer will be permitted to sell its product through wholesale and/or retail, including through e-commerce without government approval."

The FDI norms had previously allowed single-brand retailers to establish their own stores but they had to establish wholesale units so that their franchisees could be supplied with products.

However, this only complicated things as firms were compelled to have separate entities for retail and wholesale, and each of these segments had to have separate warehousing, inventory and accounting arrangements.