12 Jan 2018
INDIA: State Approval No Longer Required for 100% Overseas Ownership of Single Brand Retailers
Overseas investors can now own a 100% stake in single brand retail operations without requiring official pre-approval (that is, through the automatic route). Previously, any foreign ownership in such businesses had to be government-sanctioned once the FDI passed the 49% mark.
In addition, the requirement that single brand retailers should source at least 30% of their stock locally is to be waived for five years, with the proviso that the threshold has to be reached across the said business’ combined global operations. This exemption was previously only open to high-tech vendors.
In other developments on the FDI front, real estate brokering services may now be wholly foreign-owned without gaining prior approval, while foreign airlines will be permitted to secure a 49% stake in Air India, the national carrier, but only with government assent. This latest tranche of reforms continues the FDI liberalisation process initiated back in 2016.
For further details, see INDIA: Liberalised FDI Rules Introduced for Food, Pharmaceuticals and Other Key Sectors.