BackGovt notifies changes in FDI norms for multi-brand retail
Changes were made after foreign retailers sought clarifications on the policy
Premium(AFP)
New Delhi: The government on Thursday notified changes, to be effective immediately, pertaining to foreign direct investment in supermarkets or so-called multi-brand retail trading, that the cabinet had cleared on 1 August.
The notification comes as a formal assurance to foreign retailers such as Wal-Mart Stores Inc., Tesco Plc, and Carrefour SA that have in the past expressed plans to invest in opening supermarkets in the country.
The changes were made after foreign retailers sought clarifications on the policy and met trade minister Anand Sharma to discuss these.
The clarifications said that only 50% of the initial investment of at least $100 million made by the foreign retailer needed to go towards so-called “back-end" infrastructure (the worry for foreign retailers was that this was 50% of all investment).
They also redefined small and medium enterprises from which such retailers had to source 30% of their products as those with an investment in plant and machinery of $2 million (as against the $1 million mentioned in the original policy).
Finally, the clarifications also said the retail stores can be set up in any city allowed by respective state governments (and not only those with a population in excess of 1 million as mentioned in the original policy).
In a response to Mint soon after the 1 August changes were made, an Indian spokesperson for British retailer Tesco said that the company “welcomes the proposed changes in the policy" and was “in the process of reviewing the conditions."
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
