The government should permit 51 per cent foreign direct investment in multi-brand sports product retailing to make India, the host of the Commonwealth Games, a sourcing hub and create jobs, a study said.
"There is a need for more private involvement in the sports sector of India -- 51 per cent foreign direct investment in multi-brand retail will facilitate this," a paper by think-tank Indian Council for Research on International Economic Relations said.
India allows 51 per cent FDI in single brand retail, but multi-brand retail is restricted for foreign investment.
". . . This (sports) is a less sensitive segment of retail, unlike food and grocery, and the products sold by corporate and traditional retailers are different," it said, adding that 51 per cent FDI in single brand retail has not helped the sector.
Recommending FDI in multi-brand sports retailing, the study said foreign inflows would increase sourcing from Indian manufacturers, provide them access to technology, increase brand awareness, inculcate sports culture and encourage sports sponsorship and funding.
It further said that the present FDI restrictions are not an entry barrier, but only restrict the ability of foreign retailers to choose their most preferred route of entry.
Foreign retailers and brands are present in India through various modes like franchising, wholly owned subsidiaries, distribution and licensing agreements.
In India, retail of sports products is growing at an average rate of 20-25 per cent due to an increase in per capita income, health awareness, brand consciousness and the entry of corporate retailers in this segment.
The survey-based study found that sports retail is a small segment of retailing, but its share in total corporate retail is around 10 per cent.
About 30 per cent of sports products retailing is through corporate retail and the remaining 70 per cent is through family-owned small businesses.
The Commonwealth Games are scheduled to be held in New Delhi in October.
