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India: The International Hotspot -- Franchising Goes East

By Graeme Payne and Lisa Sen
April 30, 2008

India's attraction to European and U.S. franchisors (and all branded marketers) is not only the sheer number of potential Indian consumers, but, more importantly, a growing young affluent population with an increasing demand for quality consumer goods and services. This, in part, has been due to the 8-10% annual growth rate of the Indian economy. Further, there has been significant growth in organized retailing through large shopping malls, with a target of 600 malls by 2010 [source: 'Indian Companies on the Move ' And How,' Sathish Kulkarni, Economic Times, Mumbai, Dec. 21, 2007]. At the recent India Fashion Forum, experts predicted that the Indian retail sector is expected to grow by another US trillion dollars in the next eight years.

Despite the positive economic conditions and the demand for international brands, the Indian legal framework still raises some barriers to international business. The Indian government has the delicate task of balancing what is perceived to be in the interest of local businesses and those of foreign investors.

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