Home / Knowledge / News / Apparel/Garments / Clarifications on FDI in single brand retail trading
Clarifications on FDI in single brand retail trading
Aug '17
The Department of Industrial Policy and Promotion (DIPP), ministry of commerce and industry, Government of India, has brought out a consolidated foreign direct investment (FDI) policy document. The document mentions intent and objective in attracting foreign investment in various sectors, and also lists the conditions that need to be met.

In reference to single brand product retail trading, the document states that foreign investment is aimed at attracting investments in production and marketing, improving the availability of such goods for the consumer, encouraging increased sourcing of goods from India, and enhancing competitiveness of Indian enterprises through access to global designs, technologies and management practices.

However, FDI in single brand product retail trading would be subject to six conditions. First, products to be sold should be of a ‘single brand’ only. Second, products should be sold under the same brand internationally i.e. products should be sold under the same brand in one or more countries other than India. Third, ‘single brand’ product-retail trading would cover only products which are branded during manufacturing.

Fourth, a non-resident entity or entities, whether owner of the brand or otherwise, shall be permitted to undertake ‘single brand’ product retail trading in the country for the specific brand, directly or through a legally tenable agreement with the brand owner for undertaking single brand product retail trading. The onus for ensuring compliance with this condition will rest with the Indian entity carrying out single brand product retail trading in India. The investing entity shall provide evidence to this effect at the time of seeking approval, including a copy of the licensing/franchise/sub-licence agreement, specifically indicating compliance with this condition. The requisite evidence should be filed with the RBI for the automatic route and to competent authority for cases involving approval.

Fifth, in respect of proposals involving foreign investment beyond 51 per cent, sourcing of 30 per cent of the value of goods purchased, will be done from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen, in all sectors. The quantum of domestic sourcing will be self-certified by the company, to be subsequently checked, by statutory auditors, from the duly certified accounts which the company will be required to maintain. This procurement requirement would have to be met, in the first instance, as an average of five years’ total value of the goods purchased, beginning 1st April of the year of the commencement of the business i.e. opening of the first store. Thereafter, it would have to be met on an annual basis. For the purpose of ascertaining the sourcing requirement, the relevant entity would be the company, incorporated in India, which is the recipient of foreign investment for the purpose of carrying out single-brand product retail trading. However, sourcing norms will not be applicable up to three years from commencement of the business i.e. opening of the first store for entities undertaking single brand retail trading of products having ‘state-of-art’ and ‘cutting-edge’ technology and where local sourcing is not possible.

Lastly, subject to all the five conditions mentioned, a single brand retail trading entity operating through brick and mortar stores is permitted to undertake retail trading through e-commerce.

The seek permission of the Indian government for FDI exceeding 49 per cent in a company which proposes to undertake single brand retail trading in India, application should be made to the Secretariat for Industrial Assistance (SIA) in the DIPP, specifically indicate the product/product categories which are proposed to be sold under a ‘single brand’. Any addition to the product/product categories to be sold under ‘single brand’ would require a fresh approval of the government. In case of FDI up to 49 per cent, the list of products/product categories proposed to be sold except food products would be provided to the RBI.  (RKS)

Fibre2Fashion News Desk – India

Must ReadView All

Pic: Anton_Ivanov / Shutterstock.com

Retail | On 27th Jan 2022

UK retail sales volumes fall at fastest rate in 11 months in Dec 2021

UK retail sales volumes fell by 3.7 per cent in December 2021, the...

Pic: Shutterstock

Textiles | On 27th Jan 2022

New train route links China’s Suzhou city to Milan in Italy

A new China-Europe freight train route has been started between...

Pic: Shutterstock

Apparel/Garments | On 27th Jan 2022

UN-WTO report underrates Bangladesh's RMG industry progress: BGMEA

The recent United Nations-World Trade Organisation joint report has...

Interviews View All

Textile Industry, Head honchos

Textile Industry
Head honchos

Liquidity is a primary issue in Indian context

Textile Industry, Head honchos

Textile Industry
Head honchos

Instagram & fashion will go a long way together

Textile Industry, Head honchos

Textile Industry
Head honchos

Hopeful that issue will be resolved by first half of 2022

Sanjay Jhunjhunwalla,

Sanjay Jhunjhunwalla

In the financial hub of eastern India, Kolkata, a humble production...

Raiyan Islam,

Raiyan Islam

Founded in 1981 by Sayeeful Islam, Concorde Garments Group is a market...

Noemi Sanchez,

Noemi Sanchez

Established since 1846, Evlox is a specialised denim manufacturer with its ...

Sameer Sonkusale & Rachel Owyeung, Tufts University

Sameer Sonkusale & Rachel Owyeung
Tufts University

A team at the Tufts University in Massachusetts was recently in news for...

Serkan Gogus, Mogul Nonwovens

Serkan Gogus
Mogul Nonwovens

Mogul is a global player ranked among the top 40 nonwoven producers in the ...

Kevin Young & Tom Lucas, Web Industries

Kevin Young & Tom Lucas
Web Industries

Web Industries is a precision formatter of nonwoven materials used in baby ...

Gavin Miguel, Label Gavin Miguel

Gavin Miguel
Label Gavin Miguel

Acclaimed fashion designer <b>Gavin Migue</b>l is known for his couture...

Abhishek Bajaj & Samiksha Bajaj, Samshek

Abhishek Bajaj & Samiksha Bajaj

Samshek is a fashion forward tech brand which combines digital experience...

Anjali Bhaskar, Samatvam

Anjali Bhaskar

Samatvam, a womenswear brand that blends age-old craftsmanship with modern ...

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


Leave your Comments


The LYCRA Company Singapore  Pte. Ltd
Rosset ;& Cia Limited
Target Corporation (MN)
Calvin Klein
Alix Partners
MAS Active / MAS Kreeda / MAS Bodyline
Lenzing Aktiengesellschaft
NITI Aayog
Guess Europe Sagl,
Benetton Group
Helly Hansen Far East Ltd
IDH – The Sustainable Trade Initiative
Vardhman Textile Ltd
G-Star Raw C.V.
Truetzschler India Private Limited
Grasim Industries Limited
Maceton Limited
Arvind Limited
Recron Polyester from Reliance Industries Limited
Green Fibre
Restoque S.A.
Midas Clothing Limited
Gokaldas Exports Limited
Alison Hayes Romania
Tory Burch Hong Kong Ltd
Cat Tuong Real Estate Group Joint Stock Company
The Top Form Brassiere Manufacturing Company Limited
Etam Group Strategy Hong Kong Limited
Gatsby Africa
Tchibo GmbH
Sportmaster Ltd.
Boardriders Asia Sourcing Limited
Varner AS Retail
Chori Company Limited
International Textile Manufacturers Federation
Deckers Outdoor (Guangzhou) Consultant Co., LTD.
Eastman Chemical Company
Reiter India Private Limited
J ;& P Coats
Rayonese Textile Inc., Division de Culp Inc.
Page Industries Limited (Bangalore)
Lululemon Athletica Inc
LC Waikiki
Esprit Europe Services GmbH
Hirdaramani International Export Private Limited
KAS Direct Sourcing
Amazon China
Bluestem Global Sourcing Limited
OVS Hong Kong Sourcing Ltd.
C;&A Sourcing International Ltd
Hela Clothing Pvt Ltd
Landmark Group
IKEA of Sweden AB
Brandix Lanka Limited
Under Armour Global Sourcing Ltd
Seasalt Limited
PVH Corporation
Tommy Hilfiger
Huntsman (Singapore) Pte Ltd
Desigual - ABASIC, S.A.
Chico’ FAS
Aquarelle Clothing Limited
Sateri (Jiujiang) Fiber Co.,Ltd
H;&M Hennes ;& Mauritz (Far East) Ltd
Lacoste (Wanchai)
Aramark Uniform ;& Career Apparel, LLC
Sainsbury's Argos Asia Limited
SHAHI Exports Pvt Ltd
Groz-Beckert East Asia LLP
Sportswear Company Spa
Vianney Textil Hogar S.A. De C.V.
T.T. Limited
John Varvatos

January 2022

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

Advanced Search