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With Reference To Master Circular 2 of 2010: Foreign Direct Investment IN Retail Sector: Single Brand and Multi Brand
With Reference To Master Circular 2 of 2010: Foreign Direct Investment IN Retail Sector: Single Brand and Multi Brand
With Reference To Master Circular 2 of 2010: Foreign Direct Investment IN Retail Sector: Single Brand and Multi Brand
BY GYANENDRA CHALIHA
Indias FDI Policy is reviewed on continuos basis and changes in sectoral policy/ sectoral equity cap are notified through press notes by Secretariat for Industrial Assistance, Department of Industrial Policy and Promotion.
ROUTES OF FDI
AUTOMATIC ROUTE GOVERNMENT APPROVAL : Application for approval to : FIPB and SIA
Organised Retail: Retail Outlets, Shoping Malls , Hypermarket etc. Unorganised Retail:Local Kirana Shopes, Mom and Pop Shope etc.
India is the 3rd most attractive destination for fdi in retail sector and size of the Indian retail will be 535 US dollar by2013.
mean sale of
goods/merchandise to retailers, industrial, commercial, institutional or other professional business users or to other wholesalers and related subordinated service providers. Wholesale trading would, accordingly, be sales for the purpose of trade, business and profession, as opposed to sales for the purpose of personal consumption.(5.2.24.1.1)
Entities holding trade licenses i.e. a license/registration certificate/membership certificate/registration under Shops and Establishment Act, issued by a Government Authority/ Government Body/ Local Self-Government Authority, reflecting that the entity/person holding the license/ registration certificate/ membership certificate, as the case may be, is itself/ himself/herself engaged in a business involving commercial activity; or
APPROVAL PROCEDURE
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 the Department of Industrial Policy & Promotion. The application would 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 in the Department of Industrial Policy & Promotion, to determine whether the products proposed to be sold satisfy the notified guidelines, before being considered by the FIPB for Government approval.
Non-resident entity
Indian company A. Co
Control: The Indian company would be considered as controlled by resident Indian citizens and Indian companies if: The resident Indian citizens and Indian companies (which are owned and controlled ultimately by resident Indian citizens) have the power to appoint a majority of its directors.
60%
Resident Indian (30%)
A. Co makes investment in wholly owned subsidiary. Indirect foreign investment will be computed in the ratio of 70:30
100%
Resident Indian (30%)
MULTIPLE BRAND
Govenment has published a discussion paper on allowing FDI in multi brand retail sector.
THANK YOU