Retail FDI further liberalised
It’s unclear what the announcement is likely to be, but, there is anticipation that clarity would emerge on the following contentious issues :
1. Current policy doesn’t allow franchise model for multi brand retailing; govt wants to allow only serious investors who are willing to commit USD 100 million at the miminum in ‘owning’ retail outlets, to join the bandwagon.
2. Investors are not allowed to acquire existing back-end infrastructure; requirement is to develop and invest in green field investment up to a minimum of 50 percent of total FDI
3. Multi brand entity cannot leverage on local sourcing done by existing manufacturing /Whole sale venture.
Separately, insofar as single brand retailing is concerned, besides sourcing condition restriction, there is no clarity on whether products sold under sub-brand of internationally known brand can be allowed or not.