Govt mulls easing FDI norm for single brand retail

Govt mulls easing FDI norm for single brand retail

PTIUpdated: Thursday, May 30, 2019, 09:53 AM IST
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New Delhi : The government is considering allowing 100 per cent FDI through automatic route in single brand retail to attract a larger number of global players in the sector.

According to sources, there is a proposal to allow 100 per cent Foreign Direct Investment in single brand retail sector “through automatic route” with certain conditions.  Currently, FDI up to 49 per cent is permitted under the automatic route but beyond that limit, government’s nod is required. Foreign investment is allowed subject to certain conditions, which require products to be of a ‘single brand’ only and to be sold under the same brand globally. Furthermore, in respect of proposals involving FDI beyond 51 per cent, it is mandatory to source 30 per cent of the value of goods purchased from India, preferably MSMEs. The issue to ease the FDI policy in the sector is under discussion between the ministries of finance and commerce and industry, reports PTI.

 “The move assumes significance as the government wants to provide easy policy for both domestic and foreign investors. Single brand retail trading sector has huge potential to attract FDI,” said the source.

 The government last year tweaked the mandatory local sourcing norm. It decided to give exemption to foreign firms coming in with state-of-the-art technology from the mandatory local sourcing norms for up to three years.

 For the first time in February 2006, the government allowed 51 per cent FDI in the segment.

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