RSS FeedThe Legal Column: Foreign Investment In Retail May Need Creative Structuring
Wed, 09/13/2006 - 13:43 — Sahad P V[Editor's note: The issue of foreign direct investment in retail has puzzled many readers. Especially, when private equity funds are queuing up to pick up stake in retail chains. Most of the private equity money is of foreign origin. For instance, there is talk of UK private equity fund Actis buying a majority stake in The Nilgiri Dairy Farm, a Bangalore-based retail chain. VC Circle asked Shantanu Surpure, a partner with Economic Laws Practice, a Mumbai-based law firm, to write on the issue of FDI in retail. Here is his guest column on the topic. By the way, Shantanu would be writing a regular fortnightly column for VC Circle.]
[By Shantanu Surpure]
Retail presents the next big opportunity (worth $250 billion) for the foreign investor. However, foreign direct investment in the India retail sector is currently restricted.
There are several methods pursuant to which a foreign investor may gain exposure to the Indian retail sector:
(i) Pursuant to Press Note No. 3 (2006 series), foreign direct investment up to 51% is now permitted in single brand retail trade with the prior approval of the government;
(ii) Pursuant to Press Note No. 4 (2006 series), foreign direct investment up to 100% is now permitted under automatic route for cash and carry wholesale trade; or
(iii) The foreign investor could enter into franchise arrangements.
LVMH is among the international brands that have indicated interest in a 51% stake. However, multi-brand retail stores such as Wal Mart are not yet permitted.
Although
Comments
this is very good artical this artical tells us about "investment in retail" i want more information for this artical
this article is very nice and interestforeign direct investment up to 100% is now permitted under automatic route for cash and carry wholesale trade; or
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this article is very nice and interestingforeign direct investment up to 100% is now permitted under automatic route for cash and carry wholesale trade; or
(iii) The foreign investor could enter into franchise arrangements.
LVMH is among the international brands that have indicated interest in a 51% stake
i think the foriegn providers has been has so much of retails to give a product has so cost to our country, the local seller sell the product has high cost so, how we can deal this to do.
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This article is good. This article tells you how to invest in Retail that requires proper and creative structuring. I will be more glad if you provide me additional step-wise information about foreign investment in retail.
I think this talk for UK private equity fund Actis buying a majority stake in The Nilgiri Dairy Farm, a Bangalore-based retail chain. a partner with Economic Laws Practice, a Mumbai-based law firm, to write on the issue of FDI in retail.
This is very interesting article. It is obvious from the present policy guideline the FDI in retail n permissible only for single brand product retailing to a cap of 50percent on investment. Retail store are very fart growth.
This article is very good. In this article tells us about investment in Retail may need creative structuring. This topic foreign investment in retail may need creative structuring has confuse many readers. So I want some more information.
thank you for nice article. to get knoeledge about foreign direct investment . this article gives the good information to the users about foreign investment .
the big opportunity for the foreign direct investment in retail that have indicated interst in a 51%approval of the government it can be the permitted in realty side of the retail business.