Home / Knowledge / News / Apparel/Garments / Indian Government moves Cabinet note to relax FDI norms
Indian Government moves Cabinet note to relax FDI norms
23
Jul '13
In yet another attempt to lure foreign investors to invest in Indian retail sector through the foreign direct investment (FDI) route, the Indian Government is yet again planning to relax local sourcing and investment norms and has circulated a draft note in the Cabinet seeking views of various ministries on the issue.
 
The draft Cabinet note prepared by the Department of Industrial Policy and Promotion (DIPP), the nodal agency for FDI policy under the Ministry of Commerce and Industry, proposes to cap the requirement for investing a minimum 50 percent of the funds brought by foreign retailers during the first three years of their venture in the country in back-end infrastructure of the sector they are investing in, to US$ 50 million or only to initial investment of US$ 100 million, Business Standard reported quoting PTI.
 
Next, the note even proposes to relax norms regarding allowing foreign chains to start multi-brand outlets in cities with population of below one million and leave it to the discretion of state governments whether to allow FDI entry in their state or not.
 
Regarding the requirement of sourcing 30 percent of the products sold in Indian market from local small industries, the Government proposes to widen the definition of ‘small industry’ to include units with investment in plant and machinery to the extent of US$ 2 million from the current US$ 1 million. 
 
The Government even looks forward to encourage foreign single-brand retailers by allowing them to sell multiple 'trademarks'.
 
Several overseas retailers including Walmart, Tesco and Carrefour, are seeking relaxations and clarification on the investment norms from Indian Government.
 
Bharti Retail, the Indian joint venture partner of Walmart, said it is awaiting clarifications from the Indian Government on FDI policy in multi-brand retail trading before moving ahead with its retail expansion plans.
 
The Indian Government allowed up to 51 percent FDI in MBRT last year. But so far, only 11 Indian states have given green signal to allow foreign retailers to open stores in their territories. 
 
Earlier this month, the DIPP issued some clarifications pertaining to 30 percent sourcing from small and medium enterprises, and 50 percent investment in back-end infrastructure, in response to queries by global retailers.
 

Fibre2fashion News Desk - India

Must ReadView All

Apparel/Garments | On 27th Apr 2017

Boohoo's revenue increases 51% to reach £294.6 mn

Fashion e-commerce marketplace Boohoo has recorded a 51 per cent...

Apparel/Garments | On 27th Apr 2017

Amazon catching up with Flipkart in India: RedSeer

Online marketplace Amazon India has caught up with its biggest rival...

Textiles | On 27th Apr 2017

Seven new organisations join ZDHC Programme

The Zero Discharge of Hazardous Chemicals (ZDHC) Programme from...

Interviews View All

Pinkesh Jain
Everflow Petrofils Ltd

‘An innovative technology which India needs desperately is the...

Spokesperson
Hugo Boss

'Hugo Boss works with carefully selected sourcing partners'

Mohammad Mamun Ar Rashid
UL VS Bangladesh Ltd

Productivity, creativity and innovation play a vital role in the growth of ...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
April 2017

April 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search