Report: India eases investment for foreign retailers

New Delhi, India – The Indian government has eased its notoriously difficult restrictions on how foreign retailers must invest and source when doing business in the country. As reported by Reuters, foreign retailers will still have to source 30% of the products they sell locally, but now have five years to initially reach that goal and then have to meet it annually.

In addition, retailers will only have to put 50% of a mandatory initial $100 million investment into back-end infrastructure. Previously, foreign retailers had to put 50% of all money they invested in the country into back end infrastructure. Other rule changes make it easier for foreign retailers to select locations to do business and local suppliers.

The rule changes are primarily designed to attract foreign supermarket chains, who have been allowed to invest in India since September 2012 under strict and sometimes vague regulations. A Wal-Mart spokesperson told Reuters the company will study the new regulations. The report also indicates that national elections in May 2014 could elect a new government that would reverse the relaxed retail restrictions.

 

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