Government Notified FDI in Multi-Brand Retail Trading

 

Previously, Foreign Direct Investment (FDI) is prohibited in retail trading, except in single-brand product retail trading, in which FDI, up to 100%, is permitted, under the Government route, subject to specified conditions.

Now, The Government of India has reviewed the extant policy on FDI and decided to permit FDI, up to 51%, under the Government route, in Multi-Brand Retail Trading, subject to specified conditions. 

FDI is prohibited in:

(a) Lottery Business, including Government /private lottery, online lotteries, etc. (b) Gambling and Betting, including casinos etc. (c) Chit funds (d) Nidhi company (e) Trading in Transferable Development Rights (TDRs) (f) Real Estate Business or Construction of Farm Houses (g) Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes (h) Activities / sectors not open to private sector investment e.g. Atomic Energy and Railway Transport (other than Mass Rapid Transport Systems). 

Foreign technology collaboration in any form, including licensing for franchise, trademark, brand name, management contract, is also prohibited for Lottery Business and Gambling and Betting activities.

FDI in multi brand retail trading, in all products, will be permitted, subject to some conditions, such as: 

• Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry, fishery and meat products, may be unbranded. 
• Minimum amount to be brought in, as FDI, by the foreign investor, would be US $ 100 million. 
• Retail sales outlets may be set up only in cities with a population of more than 10 lakh as per 2011 Census and may also cover an area of 10 kms around the municipal/urban agglomeration limits of such cities.
• Government will have the first right to procurement of agricultural products.

The above policy is an enabling policy only and the State GovernmentslUnion Territories would be free to take their own decisions in regard to implementation of the policy. Therefore, retail sales outlets may be set up in those StateslUnion Territories which have agreed, or agree in future, to allow FDI in MBRT under this policy.