Recent amendments made by the Indian government whereby around 51% of foreign direct investment (FDI) in single brand retail has been increased to 100% FDI in single-brand retail via automatic route. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an Original Essay So the question arises that what exactly is this change and how does it affect the retail industry? Before this amendment was made, foreign companies could own 49% in a single brand retail chain, but had to seek permission from the Department of Industrial Policy and Promotion (DIPP) to obtain l authorization to acquire the rest of the 51%, but this new policy change gave these companies full ownership. their operations in India without applying to the DIPP. Previously, foreign players could own around 49 percent of a single-brand local retail chain, but had to seek approval from government body DIPP to get the green light to acquire the remaining 51 percent. They can now fully own their operations in India without seeking approval from the DIPP. But these new concessions are for now limited to single-brand retail chains. FDI in the multi-brand retail segment in India is still capped at 51%. To clarify single brand retail chain, it can sell and operate all its products under one brand in all its outlets like Levi's, Starbucks or IKEA for example. A perfect example to explain the concept of multi-brand retail store is Big Bazar, D-Mart or Metro which brings together several brands under one retail store roof. However, there remain some complications and conditions to clarify and differentiate these two, like if a multinational company operates a single brand retail chain, the product must also be sold under the same brand globally. In addition, the multinational also has to source about 30% of its purchases from India itself, such as raw materials or inventory for the company. However, this particular part of the rule has also undergone some changes allowing the multinational to offset any local sourcing for its global operations with the stipulated 30% quota. The question of why this rule change was changed may be due to the sole reason that Although foreign investors may see this as a vital opportunity to win over the idea of ​​selling to a population approaching 1.3 billion people , the traditional retail sector in India is still dominated by mom-and-pop outlets, as terminology thrown around by market analysts. Those who oppose FDI fear that opening the door to giant gorillas will drive consumers away from these medium and small sized outlets to the giant department stores and it doesn't stop at the fact that they can also attract their suppliers as Amazon does. did to Toys 'R' US or what Walmart is currently doing to local retailers in the Indian market. This new proposal acts as a temporary compromise solution that attempts to protect these outlets while acting as leverage for the government to test the water as to how much the presence of MNC outlets affects the Indian retailer. Certainly, many global single brand retailers focus only on high-end or luxury products, but there is still hope that this will not have a major impact on the market.