Mumbai: Japan’s richest man Tadashi Yanai met India’s Prime Minister Narendra Modi and commerce minister Nirmala Sitharaman on Wednesday, sparking hopes that his apparel retail chain Uniqlo is preparing to enter India.

Yanai is the chairman and chief executive officer of Fast Retailing Co. Ltd, which owns Uniqlo, the largest apparel retailer in Japan.

Uniqlo has been studying the Indian retail market for the past two years.

“He (Yanai) is definitely interested in setting up (operations) in India and has been studying the retail market to understand how to enter India," said Rahul Prasad, managing director, (Asia-Pacific and Middle East) Pike Preston Partners Ltd, a boutique advisory firm on mergers and acquisitions in the fashion and luxury segments.

An official statement said Yanai has expressed interest in sourcing garments from India. Fast Retailing already has manufacturing partners in China, Vietnam, Bangladesh and Indonesia.

Last year, India allowed foreign firms to set up fully-owned single-brand retail businesses, with the caveat that they buy at least 30% of their goods from local small scale industries.

The policy has drawn large retailers like Sweden’s Hennes and Mauritz (H&M), which plans to set up 50 stores at a cost of ₹ 700 crore.

The domestic apparel market in India is estimated to be $50 billion, growing at 15% every year. Of this, the organized market accounts for 30%.

According to a 5 March presentation on the Fast Retailing website, 40% of the firm’s ¥1 trillion annual revenue comes from its 466 international stores.

The company plans to open over 155 more international stores in this fiscal year, it said in the same presentation.

On 5 March, Fast Retailing listed on Hong Kong Stock Exchange, as it looked at boosting its footprint in China and Asia and to attracting more investors in that region.

By the end of February, it opened three stores in Indonesia, 14 in Malaysia, 11 in Philippines, 16 in Singapore and 14 in Thailand. In April, it opened its first store in Australia.

The retailer opened its first German store in Berlin in April and is also planning to enter Milan and Barcelona this year.

Economic and trade relations between Japan and India have steadily grown during Manmohan Singh’s tenure as prime minister.

Annual trade between India and Japan now stands at a healthy $18 billion. Japan is India’s fourth largest investor, with investments of over $14 billion since 2000, according to a 23 May India Today report.

“This (the meeting of Yanai with the prime minister) is a larger picture of India-Japan relations," said Arvind Singhal, chairman, Technopak Advisors India Pvt. Ltd, a retail consultancy firm.

The company has not made an application to start its retail business in India, Singhal added.

There are nearly 50 international fashion and apparel retail brands in India, with sales of $1 billion. In the next five years, it is expected to touch $3 billion, said Prashant Agarwal, co-founder and joint managing director, Wazir Advisors, a retail and textiles consultancy firm.

Japanese Prime Minister Shinzo Abe was one of the first world leaders to congratulate Modi on his election victory.

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