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Last Updated : May 01, 2017 04:43 PM IST | Source: Moneycontrol.com

FDI in making: Foreign retailers could soon be able to sell locally made personal care products

The government is also examining a proposal on opening up of FDI for all good manufactured in India. Foreign companies will be able to sell products easily if this gets a green signal.

Representative Image
Representative Image

Foreign food retailers may soon be allowed sell locally made personal care products up to 25 percent of their total merchandise sales, reports The Economic Times.

The report says that all the concerned ministries - Department of Industrial Policy and Promotion, food processing ministry and finance ministry – are discussing the matter of opening up the food retail sector. DIPP will float a cabinet note once the guidelines are finalised.

Moneycontrol had reported in March that the the government may allow limited sale of beauty and personal care products in global giants' food retail outlets as part of plans to ease rules for multinationals to open stores in the country.

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The move on allowing multi-brand non-food retail, once implemented, will effectively open up India’s lucrative USD 10 billion home and personal care (HPC) market for foreign deep-discount retailers, bringing them in direct competition with consumer goods companies such as Godrej, Dabur, Colgate-Palmolive and yoga guru Baba Ramdev-promoted Patanjali Ayurved

"Government has still to make up its mind about easing the rules for personal care items. The proposal is on the table and a final decision is yet to be taken," a senior government official told ET.

In 2016, the government had allowed foreign food retailers to sell locally manufactured products, but had asked them to carry more of daily use items to improve viability.

The government is also examining a proposal on opening up of FDI for all good manufactured in India, adds the ET report. Foreign companies will be able to sell products easily if this gets a green signal.

On lines of its ‘Make in India’ campaign, the proposal will boost investments in the retail sector. Bolstering manufacturing is a part of the government’s strategy to create more jobs in India.

Till now, Amazon is the only big retailer who has shown interest in entering the food retail business in India. The company has sought approval to invest nearly Rs 3,500 crore over five years to sell own privately-labled food articles, which will be sourced and packaged locally.

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First Published on May 1, 2017 04:43 pm
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