49 per cent cap on foreign direct investment (FDI) in single-brand retail would remain and there would be no change in sectoral limits, Union commerce and industry minister Kamal Nath told reporters on the sidelines of the Hero Mindmine Summit-2009. He said the changes in the FDI policy will not allow backdoor entry for foreign investment into the retail sector.
India does not allow FDI in multi-brand retail but permits up to 51 per cent in single brand retail and 100 per cent in cash-and-carry wholesale trading. Though there is a ban on FDI in big multi-brand retail stores, there is no restriction on companies accessing the foreign equity market through the American and global depository receipts.
“Today we have big players here like the Tatas and the Reliance already in retail. They already have foreign holdings, they can borrow, they can issue debentures, that in any case is allowed, it is nothing new,” Nath further added.
— IndiaRetailing Bureau