Home / Knowledge / News / Apparel/Garments / Indian Government moves Cabinet note to relax FDI norms
Indian Government moves Cabinet note to relax FDI norms
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

Courtesy: Raymond

Apparel/Garments | On 28th Jun 2017

Raymond plans to invest Rs 1,400 crore in Amravati plant

Raymond, Indian textiles and apparel major, has decided to invest Rs...

Textiles | On 28th Jun 2017

GST and textiles industry: Analysis and opinion

The Goods and Services Tax (GST) is at long last all set to be rolled ...

Textiles | On 28th Jun 2017

India probing dumping of polyester yarn by China

Indian government is probing anti-dumping allegations against a...

Interviews View All

Manuj Terapanthi

Transparent supply chain and fair trade will boost sustainable market

Dharmendra Shah
Ozone PB Spintex Limited

‘We have made huge investments to ensure quality yarn production.’

Asim Dalal
Indo Count Retail Ventures

Today, there is no other emerging market as India, "we make in India and...

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Kevin Nelson

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


news category

Related Categories:
July 2017

July 2017

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


Browse Our Archives


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