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TMI BlogCLARIFICATION ON QUERIES OF PROSPECTIVE INVESTORS/ STAKEHOLDERS ON FDI POLICY FOR MULTI-BRAND RETAIL TRADINGX X X X Extracts X X X X X X X X Extracts X X X X ..... be reckoned only with reference to the front end store. As such a multi-brand retailing entity cannot engage in any other form of distribution. (b) Whether a 'small industry' referred to the actual legal entity of manufactured/processed products purchased with investment within USD 1 million which shall not include its parent company, subsidiaries, affiliates and/or franchisor? Whether farmer, cooperative, agro-business including dairy, poultry and fresh, distributor and reseller of major branded companies will be counted as a SME if its investment is within USD 1 million? (b) The phrase used in the FDI policy is 'small industries' with maximum investment in Plant & Machinery at USD 1 million. The sourcing condition pertains only to manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that have the capacity to supply its own businesses and other businesses. It should be free to supply back-end services (e.g. logistic supply, goods) to related or third party companies, including but not limited to the company's existing wholesale entity and the retail franchisee operated by its partners. (d) As per the conditions for wholesale cash & carry trading, such an entity is not permitted to undertake retailing of any form. Therefore, both the businesses have to be kept separate through different entities. As regards supplies by MBRT company to franchisees run by its partners, it is clarified that the policy envisages multi-brand trading in retail. The MBRT entity is not envisaged to undertake wholesale activity i.e. B2B. The fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be 100% owned by a foreign entity as long as the investor in MBRT has been able to satisfy the condition that 50% of the FDI brought into the country for MBRT has been utilized in back-end infrastructure as an additionality. Small industry certification: Suppliers should have some form of authentication to confirm their status as 'small industry'. Certificate issued by District Industries Centre would be adequate authentication to confirm status of supplier as 'small industry'. Population Restrictions on operations (a) For determining whether a city has a population of more than 10 lakh, it should not be limited to the data as per the 2011 census. When a city reaches such population level after 2011, it should be allowed to self-cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Government not included in the list of states supporting FDI in MBRT, consent from the State Government would be sufficient, and a suitable amendment to the policy will be issued by the Central Government. Policy on E-commerce Allowing online sales will enable the Company to better serve Indian customers through enhanced convenience and assortment as well as improve the site customer experience. This will allow the company to make significant investments in Logistics. Multi-brand retail trading by way of e-commerce is not permitted. Front end retail franchise stores in non- FDI states: Whether the back-end infrastructure could support front end retail franchise stores in non-FDI states at arm's length price. Back end infrastru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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