In a fillip to Foreign Direct Investment in retail in India, Narendra Modi government today eased operating norms for foreign-owned single-brand retailers, allowing for more lenient local sourcing and better market access through online sales. So far, foreign single-brand retailers were required to set up brick-and-mortar stores, as a rule. The Union Cabinet, on Wednesday, allowed single-brand retailers to start online sales, waiving the previous condition. The Cabinet also expanded the definition of mandatory 30 per cent domestic sourcing norm for single-brand retailers. The issue of foreign direct investment in single-brand and multi-brand retail in India is a political hot potato.
The government last year allowed 100 per cent FDI in the single-brand retail sector, following which the opposition parties questioned the move. In the past, the UPA government led by Manmohan Singh also tried to open the retail sector for foreign direct investment which the BJP had opposed saying it will crush our retailers.
