IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 22 Aug 2013 | Removal date: open ended
Still in force

FDI: Entry and ownership rule

On 1 August 2013, the Indian Union Cabinet of Ministers approved several amendments to the FDI policy in Multi Brand Retail Trading (MBRT) as below -

  • The earlier policy specified that at least 50% of the total FDI brought in has to be invested in backend infrastructure. The amendment provides that at least 50% of the first tranch of $100 million FDI brought in has to be invested in backend infrastructure and subsequent investments can be made by the retailer as required
  • MBRT retailers are required to source at least 30% of the value of their procurement of manufactured/processed products from Indian small industries. These industries were earlier limited to enterprises with total plant and machinery investment of less than USD 1 million. This has amended to a maximum investment of USD 2 billion.
  • Further, if the enterprise were to exceed the limit of USD 1 million at any later stage after the first engagement, it would no longer qualify as a small industry for MBRT procurement. This condition has also been removed and the enterprise will qualify as a small industry for such purposes even if it exceeds P&M investments of USD 2 billion after the first engagement.
  • Such retail sales outlets were earlier restricted to cities only with a population of more than 1 million when such a city existed in the state. An amendment allows setting up such an outlet at any other city as well as per the decision of the state government.

The official press notice for the same was published by the Ministry of Commerce and Industry on 22 August 2013.

AFFECTED COUNTRIES

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