The Indian government has relaxed a number of rules relating to foreign investment in retail trading.
The Department of Industrial Policy and Promotion (DIPP) will now allow up to 49% foreign direct investment (FDI) in single-brand retail under the automatic route without the need for approval from the Foreign Investment Promotion Board (FIPB).
Multi-brand retail rules have also been relaxed. Under the previous policy, foreign multi-brand retailers were expected to source at least 30% of the value of the manufactured or processed products for sale from small industries in India, defined as those with an investment in plant and machinery not exceeding US$1 million. The government has said foreign retailers may now source from micro, small and medium enterprises which have an investment of no more than US$2 million in plant and machinery.
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