FDI rules in India to include creation of back-end logistics

September 6, 2010 |

Planet Retail 6 Sep 2010

The Indian government plans to allow only those retailers who first invest in back-end supply chain and infrastructure to set up multi-brand retail outlets in the country, India's Financial Express reports. The Indian Department of Industrial Policy and Promotion (DIPP) said that interested players will first have to set up cash & carry outlets, sourcing centres and the entire supply chain before they enter retailing.

An official involved in the discussions said: "The policy will be such that there will be a holistic approach - comprising the value chain from bottom to the top - in allowing FDI in multi-brand retail. We will ensure that retailers who want to enter India have already created jobs here."

The FDI limit in multi-brand retail is expected to be below the 51% cap in single-brand retail to ensure that control remains with Indian investors. Sources close to the discussions are expecting a recommendation of 49%.

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