The Reserve Bank of India (RBI) today operationalised the change in FDI policy by removing restrictions on foreign investment limit in single brand retail.
"...it has now been decided that FDI up to 100% would be permitted in single brand product trading under the government route..., the RBI said in a circular.
The Department of Industrial Policy and Promotion (DIPP) had earlier increased the limit of foreign direct investment (FDI) in single brand retail from 51% to 100%.
"Necessary amendments to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000...are being notified separately," the RBI added.
Removal of the investment cap is likely to help global fashion brands, especially from Italy and France, to strengthen their interest in the growing Indian market.
The government had said the move was aimed at enhancing competitiveness of Indian enterprises through access to global design, technologies and management practices.
Though 51% FDI in single brand was allowed in February 2006, not much investment has come in the sector. During last three-and-a-half years, FDI worth only Rs 196 crore was received in the sector.