FDI in retail: 'Must own brand' clause may stir up debate

It's been over a month that the Department of Industrial Policy and Promotion (DIPP) issued the FDI policy but the ramifications continue to fluster the industry. An additional condition for FDI in single brand retail has become the cause of concern.

The FDI policy laid down that the foreign investor investing in single brand retail in India should be the owner of the brand. CNBC-TV18's Payaswini Upadhyay reports with the consequences of this move.
The consolidated FDI policy for October has introduced an additional condition for foreign direct investment in single brand retail. The policy says that here onwards the foreign investor has to be the owner of the brand.
This new condition rules out many categories of investors such as financial investors including private equity and franchisees.
Foreign retail investors that own the brand right in a separate vehicle than the vehicle investing in India will also no longer qualify. Many international brands are present in India through their franchisees and licencees