fdi in retail in india
eb. 2 – As India has liberalized its single brand retail industry to permit 100 percent foreign investment, we take a look at the regulatory issues and legal structures pertinent to establishing operations in this new dynamic market. That India should be well on the radar for foreign retailers was recently supported by A.T.
Kearney, whose 2011 Global Retail Development Index ranks the nation as fourth globally.
India’s retail industry is estimated to be worth approximately US$411.28 billion and is still growing, expected to reach US$804.06 billion in 2015. As part of the economic liberalization process set in place by the Industrial Policy of 1991, the Indian government has opened the retail sector to FDI slowly through a series of steps:
The Indian government removed the 51 percent cap on FDI into single-brand retail outlets in December
2011, and opened the market fully to foreign investors by permitting 100 percent foreign investment in this area. It has also made some, albeit limited, progress in allowing multi-brand retailing, which has so far been prohibited in India. At present, this is restricted to 49 percent foreign equity participation. The specter of large supermarket brands displacing traditional Indian mom-and-pop stores is a hot political issue in India, and the progress and development of the newly liberalized single-brand retail industry will be watched with some keen eyes as concerns further possible liberalization in the multi-brand sector.
In this article, we discuss the policy developments for FDI in these two retail categories, with a focus on the details of the multi-brand retail FDI discussion paper and related policy developments.
FDI in “single-brand” retail
While the precise meaning of single-brand retail has not been clearly defined in any Indian government circular or notification, single-brand retail generally refers to the selling of goods under a single brand name.
Up to 100 percent FDI is permissible
Kearney, whose 2011 Global Retail Development Index ranks the nation as fourth globally.
India’s retail industry is estimated to be worth approximately US$411.28 billion and is still growing, expected to reach US$804.06 billion in 2015. As part of the economic liberalization process set in place by the Industrial Policy of 1991, the Indian government has opened the retail sector to FDI slowly through a series of steps:
The Indian government removed the 51 percent cap on FDI into single-brand retail outlets in December
2011, and opened the market fully to foreign investors by permitting 100 percent foreign investment in this area. It has also made some, albeit limited, progress in allowing multi-brand retailing, which has so far been prohibited in India. At present, this is restricted to 49 percent foreign equity participation. The specter of large supermarket brands displacing traditional Indian mom-and-pop stores is a hot political issue in India, and the progress and development of the newly liberalized single-brand retail industry will be watched with some keen eyes as concerns further possible liberalization in the multi-brand sector.
In this article, we discuss the policy developments for FDI in these two retail categories, with a focus on the details of the multi-brand retail FDI discussion paper and related policy developments.
FDI in “single-brand” retail
While the precise meaning of single-brand retail has not been clearly defined in any Indian government circular or notification, single-brand retail generally refers to the selling of goods under a single brand name.
Up to 100 percent FDI is permissible