The Department of Industrial Policy & Promotion, Ministry of
Commerce and Industry, Government of India (DIPP)
for the purpose of attracting investment in production and
marketing, improving the availability of such goods for the
consumer, encouraging increased sourcing of goods from India, and
enhancing competitiveness of Indian enterprises through access to
global designs, technologies and management practices has
vide Press Note 1 of 2012 dated January 10, 2012 increased
the threshold limit of Foreign Direct Investment
(FDI) in Single Brand Retail from 51% to 100%.
The same is subject to the satisfaction of the following
Products to be sold should be of a 'Single Brand'
Products should be sold under the same brand internationally
i.e. products should be sold under the same brand in one or more
countries other than India.
'Single Brand' product-retail trading would cover only
products which are branded during manufacturing.
The foreign investor should be the owner of the brand.
In respect of proposals involving FDI beyond 51%, at least 30%
of the value of products sold would have to be mandatory sourced
from Indian 'small industries/ village and cottage industries,
artisans and craftsmen'.
For the purpose of this clause, 'Small industries' has been
defined as industries which have a total investment in plant and
machinery not exceeding USD 1,000,000.
The aforementioned valuation refers to the value at the time of
installation, without providing for depreciation. Further, if at
any point in time, the said valuation is exceeded, the industry
will cease to qualify as a 'small industry' for the purpose
of this clause. The compliance of this condition will be ensured
through self-certification by the company, to be subsequently
checked, by statutory auditors, from the duly certified accounts,
which the company will be required to maintain.
An application seeking permission of the Government for FDI in
retail trade of 'Single Brand' products would be made to
the Secretariat for Industrial Assistance (SIA) in DIPP. The
application would need to specifically indicate the product/
product categories which are proposed to be sold under a
'Single Brand'. Any addition to the product/ product
categories to be sold under 'Single Brand' would require a
fresh approval of the Government.
Applications would be processed by DIPP, to determine whether
the products proposed to be sold satisfy the notified guidelines,
before being considered by the Foreign Investment Promotion Board
for Government approval.
This Press Note will take immediate effect and Paragraph 184.108.40.206
of Circular 2 of 2011 – Consolidated FDI Policy will be
The Cabinet Ministers on November 24, 2011 had approved 51% FDI in
Multi-Brand Retail and increased the threshold limit of FDI in
Single Brand Retail from 51% to 100%. While the increase in the
threshold limit in FDI in Single Brand Retail has been duly
notified pursuant to Press Note 1 of 2012, FDI in Multi- Brand
Retail is yet to see the light of the day.
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