FDI regulations liberalised, single- brand retail companies to go ecommerce

In a significant move to boost foreign direct investment in India’s single brand retail trading (Single Brand Retail) announced its liberalized Foreign Direct Investment (FDI) policy. FDI regulations liberalised, single- brand retail companies to go ecommerce.

The Government of India (GOI) in a Press Note released on November 10 eases local sourcing requirements and approval process for FDI in Single Brand Retail, among other major reforms.

 

The basic requirements are:

• Such single brand retail companies should have a brick-and-mortar outlet in India.
• Single-brand retailers to locally procure 30% of their goods sold in India.

 

This exercise of Prime Minister, Narendra Modi, is intended to further open up the sectors for more foreign investments in the country and also to make it easy to invest in India.

 

The crux of these reforms is to further ease and simplify the process of foreign investments in the country and to put more and more FDI proposals on automatic route instead of government route where time and energy of the investors is wasted.

 

This massive FDI changes may be the biggest economic push India will ever seen since the liberalization policies of 1991 under Congress Govt.

 

Now, global technology brands such as Apple or Sony will be able to open fully-owned stores in India. Others such as IKEA, Apple, Zara, H&M, GAP and Marks & Spencer will now look forward to sell their products online while operating stores in India.

 

Thus, big International single retail brands will now arrive in India. Earlier, such single brand retailers from abroad had to rely on Indian ecommerce marketplaces such as Flipkart and Snapdeal to sell their products.

 

Additionally, Indian manufacturers whose companies have been invested by foreign investors can now sell easily via online medium, which was not permitted earlier. The only condition is that 30% of the output should be sourced from locals, which should not be a difficult rule to comply, considering that majority of their products is manufactured in India.

 

Soon after the FDI policy announcement, Modi tweeted: “Govt’s commitment to development and reforms is unequivocal & unwavering. Today’s reforms are another example of emphasis on minimum government, maximum governance. They will ease, rationalise and simplify processes.”

 

As a coin have two different sides, few have openly criticized the FDI reform introduced by the Government.

Ashwani Mahajan, All India Co-Convener of the Swadeshi Jagran  Manch said, “SJM believes that the present decision of the government to ease FDI norms for major sectors of the economy has been taken in a hurried manner and without going into the pros and cons of the decision.”

 

Overall, it’s a great, progressive step towards Make In India and Digital India vision propagated by the Modi Govt.

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