Even as online marketplace giant Amazon has indefinitely put on hold its plans to buy a stake in Kishore Biyani’s Future Group due to the sudden change in foreign direct investment (FDI) in e-commerce norms, it appears another global chain might be interested in tying up with the Biyani group.
According to a report in the Economic Times, the world’s largest convenience store chain, 7-Eleven, is in talks with Future Group to enter India. A deal maybe signed by May between the two and the Kishore Biyani-owned retail company will open and operate small format 7-Eleven stores in India as a master franchisee.
““Future Retail has always maintained it is FDI (foreign direct investment) compliant, which essentially means they are looking to sell stakes,” the report said.
Apart from 7-Eleven, another deal could be in the making in the retail space. A Times of India report has said New-York listed cereal maker Kellogs could pick up a significant stake in snack major Haldiram, valuing the Indian consumer brand at over $3 billion. “The deal will hinge on all three families coming together and delivering a clean IP (intellectual property) of the brand to Kellog,” the report said.
Meanwhile, the union cabinet is expected to soon consider a proposal of foreign direct investment-linked relaxation for mandatory 30 percent local sourcing norms for foreign single-brand retailers by allowing them more time to comply with regulations.With a view to attracting big players such as iPhone maker Apple, as per the proposal, single-brand retail firms may be permitted to open online stores before setting up brick-and-mortar shops if they bring in over $200 million FDI. But such firms would have to set up brick-and-mortar shops within two years of starting online sales. Currently, online sale by a single-brand retail player is allowed only after opening of physical outlet. Retail traders may also be allowed to adjust the incremental sourcing of goods from India for global operations during the initial six to 10 years, from the current five years (beginning April 1 of the year of the opening of first store), against the mandatory sourcing requirement of 30 percent of purchases from India. These relaxations too would be subject to the quantum of FDI one brings in India.
Source: Business Standard