Cabinet okays 100% FDI in single brand retail via automatic route

K R Srivats New Delhi | Updated on January 11, 2018

Foreign airlines allowed to invest up to 49% under approval route in Air India

The Union Cabinet on Wednesday allowed foreign airlines to invest upto 49 per cent under approval route in Air India. However, this nod comes with two conditions - foreign investment including that of foreign Airlines should not exceed 49 per cent either directly or indirectly and substantial ownership and effective control of Air India would continue to be vested in Indian national.

The other amendments in FDI Policy include 100 per cent FDI under automatic route for single brand retail trading. Also, 100 per cent FDI under automatic route in construction development has been allowed.

Foreign Institutional Investors (FIIs) / Foreign Portfolio Investors (FPIs) have been allowed to invest in power exchanges through primary market. The definition of 'medical devices' has been amended in the FDI policy, an official release said.


The existing FDI policy on Single Brand Retail Trading (SBRT) allows 49 per cent FDI under automatic route, and FDI beyond 49 per cent and up to 100 per cent through Government approval route.

It has now been decided to permit 100 per cent FDI under automatic route for SBRT, the release added.

It has been decided to permit single brand retail trading entity to set off its incremental sourcing of goods from India for global operations during initial 5 years, beginning April 1 of the year of the opening of first store against the mandatory sourcing requirement of 30 per cent of purchases from India.

For this purpose, incremental sourcing will mean the increase in terms of value of such global sourcing from India for that single brand (in INR terms) in a particular financial year over the preceding financial year, by the non-resident entities undertaking single brand retail trading entity, either directly or through their group companies.

After completion of this 5 year period, the SBRT entity shall be required to meet the 30 per cent sourcing norms directly towards its India operation, on an annual basis, the release added.


The Union Cabinet has clarified that real-estate broking service does not amount to real estate business and is therefore eligible for 100 per cent FDI under automatic route.


The FDI policy has been amended to stipulate joint audits in investee companies (receiving foreign investments) in situations where the foreign investor wishes to specify a particular auditor/audit firm having international network for the Indian investee company. One of the auditors should not be part of the same network, according to the amended FDI policy.

Prior to this change, the FDI policy did not have any provisions in respect of specification of auditors that can be appointed by the Indian investee companies receiving foreign investments.


Published on January 10, 2018

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