FDI in multi brand retail trade is regulated. The restrictions may be gradually eased when it gets demonstrated that FDI has helped developments in these sectors which are important from politically and employability point of view as FDI in these sectors can truly help in doubling farm income of farmers.
FDI in Multi brand Retail Trade (MBRT):
All local Kiryana (General) Stores fall into Multi brand retail trade and therefore, opening of this sector for FDI had always been a political decision rather than a decision on merits and market compulsions and with gradual political will of successive governments in recent past, the sector has opened up though with some limitations.
|Sector/Activity||% of Equity/
|Multi Brand Retail Trading||51%||Government|
|FDI in multi brand retail trading, in all products, will be permitted, subject to the following:
(a) FDI not allowed in Fresh agricultural produce including poultry, meat etc
(b) Minimum amount as FDI would be US $ 100 million
(c) At least 50% of total FDI brought in the first tranche of US $ 100 million, shall be invested in ‘back-end infrastructure‘ within three years like warehouse, manufacturing, packaging, logistics etc
(d) At least 30% of the products purchased in value shall be sourced from Indian MSME, farmer cooperatives etc, which have a total investment in plant & machinery not exceeding US $ 2.00 million.
(e) To be met as an average of initial five year purchases and subsequently on annual basis
(f) Retail Stores to be set up in cities with population more than 1 Million based on 2011 census
(g) States may frame their own policies
The objective to allow FDI in this politically sensitive sector is to attract investments in supply chain management, the forte of large multi brand retail trade formats like Walmart, Tesco etc. and requirement of sourcing of these products from Indian MSME and farmer cooperatives will strengthen these sectors.
For knowing more about FDI in single brand retail trade, please read