subject: What You Must Know About Foreign Direct Investment Reforms In Multi Brand Retail Trade In India [print this page] The Government of India is liberalizing Foreign Direct Investment (FDI) in various sectors for economic growth. As indicated by the government, the reforms in multi-brand retail trade, single brand retail trade, civil aviation and broadcasting sectors will encourage foreign investments and increase growth.
A limit of 51% FDI in multi-brand retail has been allowed; FDI of up to 49 % in scheduled and non-scheduled air transport services has been approved; other radical reforms in the single brand retail trade and broadcasting sector have also been approved to rope in more capital for radical economic growth of the country.
Key Highlights:
Foreign Direct Investment Reform: Multi Brand Retail Trade
Approval for up to 51% FDI in multi-brand retail has been given, but the state governments have the liberty to make a final decision.
As per the approved regulations, retail stores may be allowed to be set up in the states that have agreed to allow FDI in multi brand retail trade in compliance with the state regulations.
Retail stores will be allowed to be set up in cities upon meeting the following criteria:
The population of the city must exceed 10 lakhs as per 2011 census and must cover an area of ten kilometers around the municipal or urban agglomeration limits.
States and Union Territories having only small cities, i.e. those with a population of less than 10 lakhs as per Census 2011, can also set up retail stores in one of the largest cities of their choice which would also cover an area of 10 kilometres around the municipal or urban agglomeration limits of such cities.
Fifty percent of the FDI should be invested in back-end infrastructure which includes capital spending on all activities such as processing, production, circulation, enhancement of design, quality management, packaging, supply chain, storage, storehouse, agriculture market produce infrastructure etc. Cost of land rentals will be out of the purview of being categorized under back-end infrastructure.
It is advisable to take the help of a reputed business consultant who will certainly be beneficial in keeping up with the changes in the regulations of a particular country. A good service provider would be focused on providing exceptional assistance in all the areas of your business like global transfer pricing, transfer pricing audit, international financial reporting, etc.
