Indian government has approved 100% FDI in single brand retail with a rider that for proposals involving FDI beyond 51 per cent, the mandatory sourcing of at least 30 per cent would have to be done from the domestic small and cottage industries which have a maximum investment in plant and machinery of USD 1 million (about Rs 5 crore).
Also, the products by the global chains should be of ‘single brand’ only and be sold under the same brand internationally.
FDI in Single Brand product retail trading would be subject to the following conditions:
(a) Products to be sold should be of a ‘Single Brand’ only.
(b) Products should be sold under the same brand internationally i.e. products should be sold under the same brand in one or more countries other than India.
(c) ‘Single Brand’ product-retail trading would cover only products which are branded during manufacturing.
(d) The foreign investor should be the owner of the brand.
(e) In respect of proposals involving FDI beyond 51%, mandatory sourcing of at least 30% of the value of products sold would have to be done from Indian ‘small industries/ Village and cottage industries, artisans and craftsmen.
“The Cabinet took the conscious decision to liberalize policy for FDI in single brand retail. We have now allowed foreign investment of up to 100% with riders that FDI beyond 51% there will be mandatory sourcing of at least 30% of the total value of the products sold from small industries. This step will provide stimulus to domestic manufacturing value addition and help in technical up gradation of our local small industries.” Commerce Minister Anand Sharma said.