The Hindu Business Line : French luxury industry welcomes 51 pc FDI in single brand retail

DIOR, Chanel, Louis Vuitton, Cartier, Baccarat, Lalique, Lancome are some of the famous French luxury brands currently sold through franchisee channel in star hotels across the country.

Given the fact that India has recently opened up 51 per cent foreign direct investment (FDI) in single brand, the 12-billion euro French luxury industry is eyeing the domestic luxury segment to make a presence through retailing directly.

A group of 69 companies of France from the luxury goods industry represented by the Comite Colbert is also part of the big business delegation the French President, Mr Jacques Chirac, has brought along to interact with the Indian companies.

Ms Elisabeth Ponsolle Des Portes, President and CEO of Comite Colbert, considers her grouping as "the creation of group of brands which represents excellence in national identity".

Scheduled to meet the Union Finance Minister, Mr P. Chidambaram, and the Union Commerce and Industry Minister, Mr Kamal Nath, Ms Ponsolle spoke to Business Line in an exclusive interview that the members of the Comite Colbert partake of the same conception of a certain contemporary art of living and strive to develop and foster it through their diversity. She asserted that Comite Colbert signifies the French luxury goods industry - of French origin and culture, with their design centre and headquarters in France, enjoying a great repute and with global ambition and sharing the same concept of the importance of authentic know-how and high standards and design and creativity.

The products encompassed by the apex body of luxury goods include perfume, jewellery, faience, porcelain, silver and bronze, crystal and gastronomy. The following are the excerpts of the interview:

On opening up 100 per cent retail for FDI: The Comite Colbert warmly welcomes the recent Indian Government decision to allow 51 per cent FDI in single brand retailing. It is a very good for the French brands, which are represented within the Comity Colbert because we are single-brand store. We understood from the guidelines of the Government that we would have to register which types of products under one brand. If it is LV or Chanel or Dior, which are already present here in India, all different types of products but only under one brand. In a way it is something, which is quite good for us because we are exactly in the profile, which has been encouraged by the government measure.

President Mr Chirac is giving the opportunity to ask for further step to be taken by the Government - 100 per cent FDI in retailing. We understood that Mr Kamal Nath was not averse to this idea. We shall provide him some argument to go further. One is that we consider that the opening up to 100 per cent FDI in retailing to luxury products will provide employment to India as also will drive growth. Also it will provide wider opportunities of India on the global scene.

We have only 9 of our brands of 69 represented in India, whereas in China, 90 per cent of our products are present. This is due to the obstacle of FDI in retailing and the very high tariff structure in India - normal customs duty, additional duty and education cess.

It is important for India to allow the international brands settling here because it is also a question of opening up to the global market not only as a matter of employment and taxes but it is also a matter of image.

The gap between the tariff structure, which is very high here, and the heightened interest of the Indian consumer for foreign brand products needs to be bridged. Most of the consumers of luxury goods in India are women and it is a sophisticated market where there is a strong awareness of authentic luxury products here.

On counterfeiting luxury goods: Eighty per cent of fake luxury goods are manufactured in China and sent through Dubai to European markets. The income loss for all fake industrial products is estimated at 5 billion euros.

We took up the issue with the Chinese authorities last year and we had good decisions taken against such fake goods.

On traditional handicraft items of India: We also promote groups of crafts, which represent excellence of different countries. In Shanghai, we are asked as to how to create luxury brands and we did it. We welcome any such partnership with domestic crafts industries to represent their products in the wider world.

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