How did the foreign direct investment (FDI) reforms in India affect the single and multi-brand retail trading?

The previous FDI policy only permitted one non-resident entity with ownership of a brand (or rights to a brand) to invest in Indian companies engaged in the retail trading of that brand. The reform policy now allows multiple non-resident entities to invest in Indian entities engaged in single-brand retail trading of that brand (as long as each own or have rights to the brand via a legally binding agreement).

Additionally, single-brand retail trading investment routes have been modified.

In regard to multi-brand retail trading, the policy clarifies that at least 50 percent of the first US$ 100 million invested must be in back-end infrastructure.

Furthermore, the previous requirements for multi-brand retail trading companies regarding manufacturing and processing 30 percent of products in ‘small industries’ has been discontinued. Companies are now permitted to source their products from any manufacturing or processing entity as long as investment in plant and machinery is below US$ 2 million at the first engagement. Multi-brand retail trading companies are now also allowed to establish outlets in a wider range of locations, as the previous restriction to cities with populations of at least 1 million has been scaled back. State governments now possess the authority to permit multi-brand retail trading companies to operate in their region.