Hundred per cent foreign direct investment in single brand retail has been allowed and it has been made operational with immediate effect. The Commerce Ministry on Tuesday issued a notification to this effect. 

According to the Ministry press release, this step is aimed at attracting more foreign direct investment in production and marketing of consumer goods apart from improving their availability. 

The release makes it clear that 100 per cent investment will be allowed only when the products are sold in single brand internationally. Single brand retail trading will cover only products which are branded during manufacturing and a foreign investor is its owner.

Proposals involving FDI beyond 51 per cent make it mandatory that at least 30 per cent of the value of the products sold by them will have to be manufactured from small and medium enterprises in India. The small industry has been defined as an enterprise which has not more than total investment of one million rupees including plant and machinery. So far only 51 per cent FDI trading was allowed in single brand retail.