Fema- fdi

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P.C. Joshi (Querist)

20 May 2014 Dear Friends,

first of all I want to confirm the existing FDI limit in retail. As per my knowledge the same is as under:

1. Single Brand retail: 100 FDI allowed(49% sutomatic route in excess of 49% with Central Govt.

Multiple Brand Retail- No FDI is allowed even with Govt. approval.

Now my query is:

A Ltd deals in whole sale trade and has FRI of about 30%. It wants to operate in retail sector with multiple brands but can'nt do retail sale under FDI policy. However A ltd has a private company in the same gropu in which there is no FDI.But Directors and Indian shareholders are same in both the company.

Can this Private company can do retail/online/e commece business with customers directly after buying the goods from A Ltd. as its wholesale/distributor.Please advise.

Thansk & Regards,

P.C. Joshi

Nikhil Kaushik

Nikhil Kaushik (Expert)

20 May 2014 Mr Joshi,

First of all, as on today, 51% FDI is permitted multi-brand retail.

However, till date no proposal has been accepted. With new govt coming in, there are chances of withdrawal of the FDI in multi-brand retail.

the structure you are proposing is something similar to Bharti-Walmart structure and may come under scanner once the new govt is under place..

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