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Govt issues FDI norms for retail

The Government on Monday issued guidelines for permitting foreign direct investment (FDI) in retail sector, allowing multinationals to open single brand retail outlets in the country. It also issued a notification liberalising FDI regulations in other sectors through the automatic route. The Cabinet had earlier cleared changes in the FDI norms with the aim of attracting huge investments.

The notification pertaining to retail sector states that FDI up to 51% in retail trade of ‘single brand’ products would cover only those that are sold under the same brand internationally and are branded during manufacturing.

As per the guidelines, overseas investors would have to specifically indicate “the product or product categories which are proposed to be sold under a single brand.”

The Department of Industrial Policy and Promotion (DIPP) has in the notification said, “Any addition to the product or product categories to be sold under single brand would require fresh approval of the government”. The notification, viz., press note 3 of 2006 that comes into effect immediately, states that FDI in retail would be allowed only with prior government approval.

As per the guidelines, companies would have to file their applications with the Secretariat of Industrial Assistance under the DIPP. The applications would later be considered by the Foreign Investment Promotion Board (FIPB).

The DIPP has also notified other sectors where FDI policy has been liberalised.



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