One of India's top economic policymakers said the government would consider lifting a law that limits foreign brands from owning more than 51% of their operations in India.
"We are considering it, seriously," India's Trade Minister, Kamal Nath, told a meeting of French luxury executives in Paris. Reuters says that in addition to inadequate infrastructure and excessive red tape, luxury brands operating in India face import taxes that can reach 500%.
Within India, significant political pressure exists from the country's 12 million or so small shop owners to protect India's domestic retail industry from foreign competition.
Meanwhile, a McKinsey study released last week predicted that these barriers to foreign firms will indeed fall, paving the way for organized retail to earn 14-18% of India's $450 billion market by 2015.
By comparison, the Financial Times currently estimates organized retail at 20% share of market in China and 36% in Russia.
Source: Luxury Brand Network