Consumer Durables Indian Industry Analysis

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FDI Policies: Impact on Consumer Durables Market in India

(Source: Department of Industrial Policy and Promotion)

51% FDI in Multi-brand retail

- Minimum investment cap is USD100 million

- 30 per cent procurement of manufactured or processed products must be from SMEs

- Minimum 50 per cent of the first minimum tranche of USD100 million must be invested in back-end infrastructure (logistics, cold storage, soil testing labs, seed farming and agro processing units)

- Removes the middlemen and provides a better price to farmers

- Development in the retail supply chain system

- 50 per cent of the jobs in the retail outlet could be reserved for rural youth and a certain amount of farm produce could be required to be procured from poor farmers

- To ensure the Public Distribution System (PDS) and Food Security System (FSS), government reserves the right to procure a certain amount of food grains

- Multi brand retail would keep food and commodity prices under control

- Will cut agricultural waste as mega retailers would develop backend infrastructure

- Consumers will receive higher quality products at lower prices and better service

100% FDI in Single-brand retail

- Products to be sold under the same brand internationally

- Sale of multi brand goods is not allowed, even if produced by the same manufacturer

- For FDI above 51 per cent, 30 per cent sourcing must be from SMEs

- Consumerism of the retail market

- Any additional product categories to be sold under single brand retail must first receive additional government approval

- “Make in India” initiative to further strengthen the investments coming to India