New Delhi, Jan 10 (IANS) India Inc Tuesday welcomed the government's move to allow 100 percent foreign equity in single-brand retail.
"This is a welcome move with a clear potential to lift the general mood in the economy. Increased investments by foreign single brand retailers will not only help improve consumer choice but also enhance competitiveness of Indian enterprises," said Rajan Bharti Mittal, vice chairman and managing director, Bharti Enterprises.
"We hope the initiative is a precursor to further liberalisation in the sector in the days to come," he added.
The government notifed norms, that among other things, said all wholly-owned international brands will need to source 30 percent of their requirements locally.
The government said that the move for allowing 100 percent foreign direct investment (FDI) in single brand will attract investments in production and marketing, improve the availability of such goods for the consumer and encourage sourcing of goods from India, according to a notification by the commerce and industry ministry.
Until now, global retailers owning a single brand had to look for an Indian partner as the cap on foreign equity was 51 percent.
Industry body Federation of Indian Chambers of Commerce and Industry (FICCI) too expressed its satisfaction on the development.
"The move will not only mean more FDI but lead to employment and also lead to more choices for consumers," said Rajiv Kumar, secretary general, FICCI.
He said that the global retailers will also bring in international standards and practices into the country.
"Global retailers are bound to bring in global best practices and technology that will lead to a more competitive marketplace benefiting the consumers,"
Kumar further said that the sourcing clause will benefit the small and medium industries, as at least 30 percent of the value of products sold from Indian small industries, artisans and craftspersons.
"Clause will lead to a direct benefit for the SME sector."
The notification defined small industries as entities which have a total investment in plant and machinery not exceeding $1 million.
FICCI expressed its hope that the government will be able to implement its decision to allow 51 percent in multi-brand retail.