FDI in Retail Trade in Single Brand Products

Abstract:

FDI is allowed up to 51 percent in retail trade in single brand products in India. However FDI in retail trade in single brand products is subject to approval from the Government of India. While there are many advantages to the Indian economy from FDI in retail trade for single brand products, certain conditions are to be fulfilled for getting approval for FDI in this sector.

FDI in Retail Trade in Single Brand Products

Foreign Direct Investment in Retail Trade in Single Brand Products is allowed up to 51 percent and it is entitled to those products or items that are sold under one international brand or are branded at the time of manufacturing.

While applying for the FDI in Retail sector, the retail outlet must detail about the product categories which are proposed to be sold under one brand by the applicant company. The entire system requires prior approval of the Government and is regulated by the Department of Industrial Policy and Promotion. The applications for the same should be filed with the Secretariat of Industrial Assistance and the Foreign Investment Promotion Board.

Reasons for FDI in Retail Trade in Single Brand Products

A major argument for Foreign Direct Investment in retail trade is the benefit to Indian customers from cheaper prices. Some of the important reasons for FDI in retail trade in single brand products are -

• Increased availability of goods to Indian consumers.
• More investments.
• To ensure increased competitiveness of Indian firms.
• More sourcing of Indian goods.

Important Aspects of FDI in Retail Trade in Single Brand Products-

• FDI is allowed up to 51 percent in the Retail trade in single branded products with prior approval from the Government of India.
• 51 percent FDI would only be allowed in the Retail Trade only if the products belong to a single brand.
• FDI will be allowed to the products which are branded at the time of manufacturing
• The applicant companies must take approval from the Secretariat for Industrial Assistance (SIA) in the Department of Industrial Policy & Promotion.
• New products would require fresh approval.