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Easier FDI norms soon for single-brand retail business


The government is drawing up plans to ease the foreign direct investment norms for single-brand retail, including the condition that global firms will have to source 30% of their requirements from local small firms and artisans. This is seen as a clear sign that the Centre is paying heed to the criticism by business that restrictive policy environment is hurting India’s image as a global investment destination.


The department of industrial policy and promotion (DIPP), piloting the policy, has begun discussions with other ministries, especially the ministry of small and medium enterprises (MSME), to ease the sourcing clause, sources told HT.


A minister told HT: “It is likely that the matter will be taken to the cabinet in June itself.” 


Another government source said the move to ease norms for single-brand retail might mark the beginning of a flurry of moves to be unveiled during the monsoon session of Parliament in July and August after the presidential elections get over.


Last year, political compulsions forced the government to quickly bottle up the move to allow FDI in multi-brand retail. But it threw open the gates for the single-brand retail business, hoping that brands such as Prada, Swedish home furniture giant IKEA, and sports goods majors would set up, manage and own exclusive outlets in India.


But globally, single-brand retail businesses that follow the 100% ownership model have been citing India’s restrictive conditions, including the 30% mandatory sourcing.


British footwear maker Pavers has so far been the lone applicant ever since the new norms for single-brand retail were notified in January 

this year.


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