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Govt clears first FDI proposal in retail sector

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Moja Shoes-Tano India venture to set up first retail store

New Delhi , May 23

Despite all the hullabaloo, foreign direct investment (FDI) in the retail sector kick-started on Tuesday with the Government clearing the first proposal. FDI up to 51 per cent in retail trade had been permitted by the Government in February.

Interestingly, none of the big names in global retail business, be it the Wal-Marts or the Home Depots of the US, or the likes of Carrefour of France or Tesco of the UK, have anything to do with it.

The Finance Minister, Mr P. Chidambaram, has approved the first proposal to set up single brand retail store with FDI to a little known Haryana-based company - Moja Shoes Private Ltd. The foreign entity is Mauritius-based Tano India Private Ltd Fund-I, which would bring in FDI worth Rs 2.85 crore (in face value) into the capital of Moja Shoes, according to an official release.

This proposal was among the total of 12 FDI proposals approved by the Finance Minister, involving FDI worth Rs 371.84 crore in various sectors.

The Moja-Tano joint venture would be setting up an exclusive retail outlet for Nike products that would include footwear, sportswear, boots, slippers, sandals, athletic shoes and apparels of the same brand, the release added.

Other proposals

Among the other proposals approved by the Minister, the largest is the proposed conversion of foreign currency convertible bonds (FCCBs) worth Rs 250 crore issued by Deccan Chronicle Holdings Ltd into equity shares not exceeding 10 per cent of the company's share capital.

The Thailand-based hospitality group AAPC (Thailand) Ltd, too, has been given the permission to invest Rs 80 crore in AAPC (India) Hotels Management Private Ltd for operating and managing hotels in India, Nepal, Sri Lanka and Bangladesh under various Accor brands. The company has also been granted permission for conversion of status from operating company to operating-holding company.

Global telecom major AT&T Inc, too, has received approval to invest up to 74 per cent in a joint venture company with the Mahindra's involving FDI worth Rs 18.5 crore, the release said. This proposal was earlier deferred by the FIPB following the Department of Telecom seeking some clarifications.

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