International brands’ aggressive expansion into India has hit the wall as Indian retail companies encourage their foreign partners to put roll-out plans on hold.

DKNY, Burberry and Prada brand Jil Sanders are all understood to have put the brakes on plans to debut in the country, as their joint venture partners assess the impact of the global downturn on the Indian retail market.

The decision is the latest sign that the shine has come off the emerging Indian retail market.

Last week, Home Retail Group confirmed that, after a two-year review of its Indian operation with partners Shoppers’ Stop and HyperCity, it would shut its Argos fascia in the country.

Indian retail group Reliance Retail is also believed to have axed its wholesale team, putting its cash and carry operations on hold to conserve cash in the weakening market. The move will interest international retail giants including Wal-Mart, Tesco and Metro – all of whom want to use the wholesale route as a way to enter the Indian market.

In addition, Future Group has severed its venture with French fashion chain Etam and Indian fashion houses including Madura Garments, Arvind and Raymond are also expected to axe international partnerships.

Domestic businesses have also been hit, with the country’s largest discount supermarket chain Subhiksha announcing that it may be forced to close as many as half of its 1,600 stores.

Planet Retail global research director Bryan Roberts said: “Despite its reputation as a fast growing economy, India is still susceptible to any downturn.

“There are a lot of people chasing not much market. There is not enough infrastructure development or middle class shoppers. Many international players have enough to worry about at the moment without putting money into unproven markets.”

Topics