The government's move to liberalise foreign direct investment (FDI) policies, especially in retail, is already adding to its coffers.
With a number of investment proposals lined up for single-brand retail, if all goes well, FDI from the portfolio alone could be over Rs. 2,500 crore. However, the government, which recently allowed 51% FDI in multi-brand retail, is yet to receive proposals in the multi-brand retail segment.
"The government is closely looking into the proposals so that they can get cleared at the earliest and can send right signals to global investors," a senior government official told HT.
The Foreign Investment Promotion Board (FIPB) has already cleared the applications of US-based Fossil Inc and French retailers Le Creuset and Decathlon for 100% FDI and a joint venture proposal by French fashion house Promod SA.
Though the government is yet to receive proposals for the multi-brand retail segment, sources said Wal-Mart and Carrefour, among others, are currently tying up the final knots before placing their applications.
According to new regulations laid down by the government, multi-brand retailers would be required to source one-third of their products from small and medium enterprises and whose investments should not be beyond $1 million. Besides, they would also be mandated to invest a minimum of $100 million, of which 50% has to directed into backend infrastructure over a three year period.
"Multi brand retailers naturally would have to do their homework before getting into the fray and this would take some time but proposals would come in soon," a source said.
"Despite the opening up of FDI in the sector, multi brand retailers have not been able to make progress beyond the institutional and bulk sales in India and going forward, uniform and single-window regime across all states in India holds the key to success of FDI in multi-brand retail in India," said Manoj Kumar, managing partner of corporate law firm, Hammurabi and Solomon.