An international company hoping to introduce its brand into India, directly or through the franchise route, may soon have to first invest in the country. A proposed move by the government will put a spoke in the blueprints of a large number of foreign retail companies planning to licence their popular brands to Indian firms.
This was being done to stop companies using the franchisee route from circumventing government policy on single-brand and multi-brand retail, a government official said. The government is of the view that domestic firms entering into franchisee agreements with international companies to bring multiple brands and products into the country nullifies the very objective of foreign investment restrictions in the retail sector.
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