The Government of India has made key changes to the Foreign Direct Investment (FDI) policy by allowing 100% investment for retail trade and eight other sectors. This key change in the FDI policy will benefit Apple who has been striving to open it’s own retail stores in the country for a long time.
The decision regarding the FDI policy was taken at a high-level meeting chaired by Prime Minister Narendra Modi earlier today. Last month, the iPhone and iPad maker who had applied for a single brand license for retail stores did not get exemption from 30% local sourcing condition. It had filed a proposal with DIPP at the beginning of this year following which the company resubmitted the proposal with necessary changes and additions in March.
Until now, Apple been relying on distributors such as Redington and Ingram Micro to sell its products in the country. Along with Apple, the latest change in the FDI policy will also help Chinese smartphone makers Xiaomi and LeEco who are also trying to open retail stores in the country.
Existing rules allowed FDI up to 49% on a case-to-case basis, wherever it is likely to result in access to modern and “state-of-the-art” technology in the country.
The new FDI Policy for Single Brand Retail Trading reads,
It has now been decided to relax local sourcing norms up to three years and a relaxed sourcing regime for another five years for entities undertaking Single Brand Retail Trading of products having ‘state-of-art’ and ‘cutting edge’ technology.
The latest amendments to the FDI Policy are meant to liberalise and simplify the FDI policy so as to provide ease of doing business in the country leading to larger FDI inflows contributing to growth of investment, incomes and employment.
Besides retail trade, sectors like defense, food products, civil aviation, pharmaceuticals and broadcasting have also benefited from the refreshed FDI policy.