Retail Policy in India
Retail: Multiple Regulators
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• FDI isn’t allowed in multi-brand retailing
• 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