Fabian Demicoli

India liberalises retail sector


After many months of standstill, the
Indian government announced reforms by opening foreign direct investment and
allowing the establishment of a modern retail system.

For the multi-brand sector, foreign
owned companies will be allowed to take a share of 51 percent in retail stores
in a local partnership (in the participating Indian states) after India's
government reversed that decision in December because of political opposition.
Companies must spend half of their investment on infrastructure such as
processing, manufacturing, storage, warehouses and packaging.

For the single-brand sector the
sourcing norms for FDIs have been relaxed by the government. For FDI beyond 51
percent in single-brand retail, 30 percent sourcing will be done "from India,
preferably from SMEs, village and cottage industries, artisans and craftsmen,
where is feasible".

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