New Delhi, Jun 7 (KNN) Clearing the air and leaving no scope for global retailers to get away, the government has said  that the conditions on multi brand chains  to source 30 per cent of their requirements will be applicable to the front end stores only and multi brand retailers cannot engage in any other form of distribution.
 
The government further clarified that the sourcing conditions pertains only to manufactured and processed products. The FDI policy has put a cap of USD one million investment on plant and machinery for classifying the units to be called a small industry.
 
The government has also made a condition that investors can only invest in existing projects and they cannot acquire supply chain from an existing entity.
 
Any investment towards existing infrastructure company will not be treated as the fulfilment of the conditionality of 50 per cent investment in back end infrastructure, said an official statement.
 
Also the multi brand retail trading by e-commerce is not permitted.   
 
The government made it clear that no thoroughfare will be allowed by acquiring existing stores but they will have to open front end stores.
 
The government will decide over the amendments in MBRT but state regulation will also be applicable at the same time.  The government has also notified the states which have shown interest in attracting FDI in MBRT.
 
If a foreign investor approaches a 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.
 
The government’s clarification has sorted out the confusion about whether 50 per cent in back end condition applied to the minimum required investment of USD 100 million or the first tranche of investment.  (KNN)