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Talks with Japanese clothing major Uniqlo are among the priority business meetings that Prime Minister Narendra Modi is learnt to have lined up during his first international bilateral. On his trip to Japan starting Saturday, Modi is expected to meet Uniqlo Chairman Tadashi Yanai to carry forward their discussion on the retailer's multi-billion dollar India investment plan. The prime minister's office has been in touch with the textiles ministry for details about the company's India plans.
Ahead of the visit, Modi tweeted in Japanese on Thursday: "Friends from Japan asked me to talk to the people of Japan directly in Japanese. I also thank them for helping with the translation…." Japanese Prime Minister Shinzo Abe tweeted back: "India has a special place in my heart. I am eagerly waiting for your arrival in Kyoto this weekend." Japan was supposed to be the first international visit for Modi, but had to be deferred for other reasons, including the Parliament session. Bhutan was the first foreign trip that Modi undertook as PM.
In terms of foreign direct investment (FDI) into India, Japan ranks fourth. The visit is also important in a strategic sense as it is a part of a vision to counter China. Modi, who's visited Japan many times as Gujarat chief minister, will be accompanied by at least 12 top industrialists, including Mukesh Ambani, Gautam Adani, Azim Premji, Sunil Mittal, Chanda Kochhar and Kiran Mazumdar-Shaw. He's expected to discuss trade, economic, banking and defence issues with the Japanese Prime Minister.
As for Uniqlo, Chairman Yanai had a one-on-one with Modi in June while on a company delegation for meetings with the textile and commerce ministries.
Uniqlo has plans to set up hundreds of single-brand retail stores in India in the long-term, according to people in the know. There's no cap on foreign direct investment in single-brand retail. Although the Bharatiya Janata Party (BJP) is opposed to foreign investment in multi-brand retail or supermarket chains, it has not shown any resistance to global single-brand stores.
Recently, American chain GAP announced its entry into India through a tie-up with Arvind Brands. Among the other big brands, furniture major IKEA, fashion chain H&M and watch group Swatch are planning to open 100 per cent owned single-brand stores in the country. Brands such as Zara and Marks & Spencer already operate in India through tie-ups with Indian companies.
Though Fast Retailing Co Ltd's Uniqlo has been exploring opportunities to set up stores in India, it is learnt to have indicated that in the first phase, it would like to set up a sourcing base in India for export to other countries. Uniqlo stores may come in the next phase, though no timeframe is given. According to sources, in the medium- to long-term, the company is looking at "investing heavily" in India. It runs 2,000 outlets across the world.
Uniqlo wanted India to identify the 10 biggest manufacturers with which it could tie up for exports, and about 20 names were given. Among the global brands sourcing from India are Zara, Next, GAP, Marks & Spencer, Ann Taylor, Ralph Lauren, Abercrombie & Fitch. Currently, Uniqlo sources apparel from China, Vietnam, Bangladesh and Indonesia.
