INDIA: Bid to Ease Single-Brand Retail Rule for India foreign investment

Monday April 30 2012

In relation to the bid to ease single-brand retail rule for India foreign investment, it has been reported that the Indian government is planning to dilute single-brand retail norms to allow foreign firms to continue sourcing from small industries even after their size increases as a direct result from their link with such associations.

Earlier this year, the government had lifted restrictions on certain global chains.

While allowing 100 per cent Foreign Direct Investment (FDI) in single-brand retail, the government had made it mandatory for the foreign retailers to source at least 30 per cent of their goods from small and cottage industries, which have a maximum investment in plant and machinery of $1 million (about Rs 5 crore).

The decision to increase FDI in single-brand retail from 51 per cent to 100 per cent was taken by the cabinet in November along with the proposal to open the gates to overseas investment in multi-brand retail. However, the decision on multi-brand was put on hold because of protests by the Opposition as well as UPA allies such as the Trinamul Congress.

This information will be updated as more details become available