September 23, 2019
India liberalizes foreign direct investment policy for certain sectors
In line with the 2019 budget announcements, the Indian Government introduced the further liberalization of its foreign direct investment (FDI) policy on 28 August 20191 with the intent of attracting higher FDIs and promoting the “Make in India” initiative of the Government. The changes in the FDI policy will be effective from the date of issuance of the notification by the Reserve Bank of India.2
Single brand retail trading (SBRT)
The changes made by the Government are anticipated to provide a boost to foreign investment in India. The contract manufacturing FDI policy may lead to the establishment of additional Indian facilities, particularly in light of recent global trade developments, and creates an opportunity for employment growth, promotion of exports and the expansion of India’s role in global supply chains.
1. Refer to Press Note 4 issued on 18 September 2019.
2. The notification has not been issued at the date of this Alert.
3. No specific government approvals are required prior to establishing a company undertaking such activities in India.
4. Refers to companies that have a physical presence (e.g., a retail shop in a building) and offer face-to-face customer experiences.
5. Government approvals are required prior to establishment.
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (India), Mumbai
Ernst & Young LLP (India), Hyderabad
Ernst & Young LLP (United States), India Tax Desk, New York
Ernst & Young LLP (United States), India Tax Desk, San Jose
Ernst & Young Solutions LLP, India Tax Desk, Singapore
Ernst & Young LLP (United Kingdom), India Tax Desk, London
Ernst & Young LLP (United States), Asia Pacific Business Group, New York