'Massimo Dutti' brand in India with the government relaxing ownership norms for FDI in single brand retail.
The application of the Netherlands-based company was earlier rejected as it violated a FDI rule which required the investor to own the brand it proposed to bring to the country.
"Now we have relaxed that particular rule. Zara can reapply to set up stores," Secretary in the Department of Industrial Policy and Promotion (DIPP) Saurabh Chandra told PTI.
The 'Massimo Dutti' brand is owned by Spanish retail chain 'Inditex', but the application to set up stores in India was made by its group firm Zara Holdings Netherlands.
Now under the relaxed norm, "only one non-resident entity, whether owner of the brand or otherwise, shall be permitted to undertake single brand product retail trading in the country".
The firm, however, will have to have the authorisation from the brand owner, in case if it doesn't own the label.
Earlier this year, Zara had proposed to set up a joint venture with 51 per cent foreign equity participation for single-brand retail trading of Massimo Dutti brand.
Inditex has its flagship Zara stores in India through a 51:49 joint venture with Tata group's Trent and currently runs eight Zara outlets across Mumbai, Pune, Bangalore and Delhi.
Inditex has 5,618 stores in eight formats around the world.