A couple of weeks after Prime Minister Manmohan Singh had given the green signal on relaxing foreign investment in several key sectors, the Government on Thursday cleared liberalisation of FDI norms in fields like multi-brand retail, telecom, defence production and insurance, with an eye on boosting the sluggish economy.
The Government eased norms for FDI in multi-brand retail, diluting contentious 30 per cent sourcing clause and allowing foreign chains to set up stores in cities with less than 10 lakh population to accommodate demands of global retailers like Walmart and Tesco. In a slew of decisions taken by the Cabinet, the investment requirement on back-end infrastructure by a foreign retailer has been kept at 50 per cent of the first tranche of investment only.
The mandatory requirement is that foreign retailers have to bring in a minimum of $100 million capital for setting up shops in the country. Commerce Minister Anand Sharma told the media said that the relaxation in multi-brand retail norms will give "more clarity and more space to investors".