DIPP clarifies FDI in multi-brand retail trading

0
1400
LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link

On 6 June, the Department of Industrial Policy and Promotion (DIPP) issued a clarification on the provisions for multi-brand retail trading (MBRT) under the consolidated foreign direct investment (FDI) policy issued by the DIPP through circular 1 of 2013 on 5 April.

Certain key elements of the clarification are as follows:

India_supermarket_retouched_3Local sourcing requirement

Press note 5 (2012 Series) (subsequently incorporated in the FDI policy) provided that “at least 30% of the value of procurement of manufactured/processed products purchased shall be sourced from Indian ‘small industries’”. Since the press note did not mention whether the sourced goods were required to be sold in front-end units of the MBRT entity, it was unclear whether goods sourced by an MBRT entity could be sold to its group entities or other entities in India or abroad. The DIPP has now clarified that the 30% that is sourced can only be sold at front-end stores and cannot be distributed by means other than through those stores.

You must be a subscribersubscribersubscribersubscriber to read this content, please subscribesubscribesubscribesubscribe today.

For group subscribers, please click here to access.
Interested in group subscription? Please contact us.

你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章,欢迎成为我们的订阅会员成为我们的订阅会员

已有集团订阅,可点击此处继续浏览。
如对集团订阅感兴趣,请联络我们

The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.

LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link