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Luxury to gain if India lifts FDI cap

The world’s top luxury brands stand to make big gains if the Indian government goes ahead with plans to lift its cap on foreign retail investment.

Currently India allows 51% foreign direct investment (FDI) in single-brand retail firms. Its government is now considering letting foreign firms invest 100% in Indian operations.

Luxury goods makers like Louis Vuitton, Bottega Veneta and Jimmy Choo would stand to gain huge profits should the Indian cabinet approve the FDI plans, according to The Economic Times.

The Indian luxury market was estimated at $4.76 billion (£3.07 billion) in 2009 and is projected to triple to $14.7 (£9.5) billion by 2015. Awareness of luxury brands continues to spread in the country, where incomes are rising and the number of high net worth individuals continues to increase.

Chief representative in Asia for French luxury group LVMH, Tikka Shatrujit Singh, told the Indian newspaper opening up to foreign retail investment would give brands a greater appetite to invest in the country.

Sanjay Kapoor, managing director of Genesis Luxury, which represents brands like Canali, Jimmy Choo and Bottega Veneta in India said the move would draw new brands in. “Brands that want to come in directly into the country have been waiting,” he said.

India already allows 100% FDI in its wholesale operations.

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