Consolidated FDI Policy 2020
Department for Promotion of Industry and Internal Trade
(1) FDI in multi brand retail trading, in all products, will be permitted, subject to the
following conditions:
(i) Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh
poultry, fishery and meat products, may be unbranded.
(ii) Minimum amount to be brought in, as FDI, by the foreign investor, would be US $ 100
million.
(iii) At least 50% of total FDI brought in the first tranche of US $ 100 million, shall be invested
in 'back-end infrastructure' within three years, where ‘back-end infrastructure’ will
include capital expenditure on all activities, excluding that on front-end units; for
instance, back-end infrastructure will include investment made towards processing,
manufacturing, distribution, design improvement, quality control, packaging, logistics,
storage, ware-house, agriculture market produce infrastructure etc. Expenditure on land
cost and rentals, if any, will not be counted for purposes of backend infrastructure.
Subsequent investment in backend infrastructure would be made by the MBRT retailer as
needed, depending upon its business requirements.
(iv) At least 30% of the value of procurement of manufactured/processed products
purchased shall be sourced from Indian micro, small and medium industries, which have
a total investment in plant & machinery not exceeding US $ 2.00 million. This valuation
refers to the value at the time of installation, without providing for depreciation. The
‘small industry’ status would be reckoned only at the time of first engagement with the
retailer, and such industry shall continue to qualify as a ‘small industry’ for this purpose,
even if it outgrows the said investment of US $ 2.00 million during the course of its
relationship with the said retailer. Sourcing from agricultural co-operatives and farmers
co-operatives would also be considered in this category. The procurement requirement
would have to be met, in the first instance, as an average of five years’ total value of the
manufactured/processed products purchased, beginning 1
st
April of the year during
which the first tranche of FDI is received. Thereafter, it would have to be met on an
annual basis.
(v) Self-certification by the company, to ensure compliance of the conditions at serial nos. (ii),
(iii) and (iv) above, which could be cross-checked, as and when required. Accordingly,
the investors shall maintain accounts, duly certified by statutory auditors.
(vi) Retail sales outlets may be set up only in cities with a population of more than 10 lakh as
per 2011 Census or any other cities as per the decision of the respective State
Governments, and may also cover an area of 10 kms around the municipal/urban
agglomeration limits of such cities; retail locations will be restricted to conforming areas