Retail percent with FIPB approval is allowed for

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Retail Policy in India

Retail: Multiple Regulators

•        FDI isn’t allowed in multi-brand retailing

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•        100% FDI is allowed in cash and carry wholesale trading

•        Since 2006, FDI of up to 51% is allowed in a single-brand retailing – FIPB approval

§   only single brand products could be sold

§   Products should be sold under their brand internationally

§   They would only cover products which are branded during manufacturing and

§   Any addition to product’s category line to be sold under “single brand” would

§  Require fresh approval from the government.

•        FDI up to 100 percent with FIPB approval is allowed for trading of items sourced from

§   small-scale sectors

§   test marketing

§   trading of items for social sectors

§   Trading of hi-tech, diagnostic items, medical and

§   Domestic sourcing of products for exports subject to Policy

•        FDI up to 100 percent is permitted in e-commerce activities – B2B activities

•        FDI up to 100 percent is allowed for manufacturing – wholly-owned subsidiaries can have retail outlets

•        100% FDI in franchisee and commission agent services – RBI approval

FDI not an Entry ban – Multiple Routes

•        100% FDI in wholesale cash and carry is most suitable for volume based business

•        Direct selling is a part of wholesale trading where potential route for sports and fitness goods retailers lies

•        Non-store formats like telemarketing is also viable

•        Most foreign retailers enter into exclusive licensing and distribution agreements e.g. Lotto Sports Italia

•        Wholly owned subsidiary through setting up manufacturing e.g. Nike, Reebok, Adidas, Asics

•        Franchising is also a common mode to increase retail footprints in the market

Categories: E-Commerce


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