The Department of Industrial Policy and Promotion (DIPP) may review FDI norms in single brand retail as the move has not led to foreign brands to come rushing in India.

In 2011, the government allowed up to 100 per cent FDI in single brand retail, making way for companies like Marks & Spencer's and Ikea to directly run stores in India. However, the permission came with a clause of 30 per cent domestic sourcing if FDI was above 51 per cent. This particular clause has been a deterrent for foreign brands who wished to expand their operations in the country. So far, proposal by London based Pavers for 51 per cent FDI is the only one received to ramp up its India operation in line with the new FDI rule for single brand retail.

However, DIPP cannot unilaterally change the domestic sourcing clause, which was proposed by Ministry of Micro, Small and Medium Enterprises (MSME). DIPP is likely to hold discussion with the MSME Ministry in this regards.

During the month, the Ministry of Finance, on recommendations of the FIPB cleared 25 FDI proposals worth Rs. 2,973.40 crore, including that of AIF III of Mauritius and Mumbai based Microqual Techno.

The Mauritius based AIF III Sub proposes to induct foreign investment in the units of a Fund constituted as a Trust. The proposal will bring in FDI worth Rs. 1,000 crore. Microqual Techno's application is to increase foreign equity to carry out business of wireless telecommunications. The proposal will bring in FDI worth Rs. 522.90 crore. The ministry has also approved the proposal of Mauritius based Mozart for infusion of foreign investment in an existing company in the pharmaceuticals sector (brownfield investments) has also been approved. The company has proposed to bring in investment worth Rs. 300 crore. Sun Pharma Research Company's proposal for infusion of foreign equity by way of issue of partly paid up shares to carry out the development of new proprietary drugs has been approved.

Other proposals which have been approved include Genworth Financial Mortgage Guaranty India (Rs. 124 crore, Plethico Pharmaceuticals, Mumbai (Rs. 500 crore) and Kintetsu World Express (India), Karnataka (Rs. 267.69 crore). The ministry rejected eight proposals and deferred decision on 13 applications. The proposals that have been rejected are those of Budenheim India, New Delhi; Hey House Publishers (I) and Growing Opportunity Finance (India), Chennai.