The Union cabinet has allowed 100% foreign direct investment (FDI) in single-brand retail without prior government approval and liberalized local sourcing norms. Although 100% FDI is already permitted in single-brand retail, only up to 49% was allowed through the so-called automatic route and investment above that needed government approval. The current FDI policy says that local sourcing norms will not apply for up to three years after the opening of the first store for single-brand retailers of products having ‘state-of-art’ and ‘cutting-edge’ technologies and where local sourcing is not possible. Large global retailers would be seriously considering entering India or accelerating their entry plans because of the new sourcing rule.

(Live Mint)