On 10th January
2012 the Government of India allowed foreign retailers to hold up
to 100% shares in a company involved in single brand retail, up
from a limit of 51% but subject to a number of conditions. Some of
the conditions attached to the policy were difficult in practical
terms to implement for most foreign brands.
One that was particularly
difficult was the need for the foreign investor to be the owner of
the brand. The requirement that 30% local sourcing rule from small
scale industries or business was unworkable for many premium brands
and unreasonable for a large investor.
Several applications for
consent from the Government were either rejected or stuck in the
bureaucratic process. As a result, The Government has decided to
amend these two most problematic conditions. The current
position is clarified in a notification dated 21st
September 2012 from the Department of Industrial Policy
and Promotion of the Government of India. The conditions amended
- Products to be sold should
be of a 'Single Brand' only.
- 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
- 'Single Brand'
product-retail trading would cover only products which are branded