Insider Media Limited

Retailers in the West Midlands stand to gain as India relaxes its rules on inward investment, according to law firm Shakespeares.

However, the Midlands firm warned that care is still needed to ensure that local compliance requirements that vary from state to state are met.

The Indian government recently announced that it would allow single brand retailers such as Marks &Spencer, Debenhams and The Body Shop, which already operate in the country, to do so without an Indian partner for the first time.

Both existing retailers and new entrants will now be able to acquire, invest or increase their shareholding up to 100 per cent- beyond the previous limit of 51 per cent on Foreign Direct Investment (FDI) in the sector.

Shakespeares said the move has paved way for an "excellent opportunity" for UK retailers and global brands already operating in India to increase their investment.

Viplavi Mahendra, head of the India team at Shakespeares, said: "India's decision to open the door wider to retail investors is a significant opportunity when you bear in mind that the country has a growth rate of around 10 per cent - much higher than in the UK or in other more traditional export markets, such as Europe and North America.

"With a population of 1.2 billion, the country has a thriving consumer base, which is expected to exceed 300 million by 2015 - equivalent to the entire population of the US. As a result, demand for luxury and international, branded goods is growing."