India permits 100% FDI in single-brand retail

The Indian government has formally issued a notification permitting 100 percent foreign direct investment (FDI) in single-brand retail, from the earlier policy of 51 percent.

Until now, global retailers owning a single-brand had to partner with an Indian entity, as the cap on foreign equity was 51 percent.

However a clause which makes it mandatory for retailers to source 30 percent of their products sold from the Indian small/village/cottage industries may not go down well with those global retailers either planning to hike or mulling new investments.

According to the government, this move will help attract investments in production and marketing and encourage sourcing of goods from India.

This decision however, has paved the path for 100 percent FDI in multi-brand retail in the near future.

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