IndiaRetailBiz

Marks & Spencer– the British iconic retailer — which in April this year formed a 51:49 joint venture with Reliance Retail– the fastest growing retailer of India, has obtained clearance of the government of India to invest Rs 230 crore in the joint venture called Marks and Spencer Reliance India Private Ltd (earlier known as Tapti Trading).

The investment approval was one of the 28 FDI proposals, involving foreign investment of Rs 1,328 crore, cleared by P Chidambaram, the Union Finance Minister, based on recommendations made by the Foreign Investment Promotion Board (FIPB).

The recommendation was made as the proposal was in line with the government’s policy of allowing up to 51% foreign equity in single brand front-end retail in India. No foreign investment, though, is allowed in front-end retail.

As reported earlier, according to terms of the JV agreement, Marks & Spencer will hold financial (51%) and operational control in the joint venture. The joint venture over the next five years wishes to open 50 large format ‘Marks & Spencer’ stores in India. These stores will be almost three to four times of the size of the existing 14 M&S stores in India. The existing M&S stores are under franchisee arrangement with Planet Retail, a company owned by V N Sharma (an Indosia-based Indian).

Likewise, another joint venture (50:50) of Reliance Retail for setting up front-end stores for optical products with the Netherlands-based Pearle Europe announced in March 2008, has also received the clearance for foreign investment in India.