The Union Government, on 10 January 2012, notified 100 per cent FDI in single-brand retail under the government approval route thus paving way for global chains like Adidas, Louis Vuitton and Gucci to have full ownership of their India operations. Presently, for single-brand retailers, 51 per cent FDI is permitted. Removal of investment cap will help global fashion brands, especially from Italy and France to strengthen their interest in the growing Indian market. "FDI in single brand has led to emergence of some global majors in Indian market. This will provide stimulus to domestic manufacturing value addition and help in technical upgradation of our small industry," said Anand Sharma, Commerce and Industry Minister. However, in respect of proposals involving FDI beyond 51 per cent, the mandatory sourcing of at least 30 per cent will have to be done from the domestic small and cottage industries which have a maximum investment in plant and machinery of $1 million (approx Rs 5 crore).

Though the government has gone ahead with its decision for 100 per cent FDI in single brand retail, the permission to allow 100 per cent FDI in multi-brand retail still hangs in balance. In November 2011, owing to the widespread opposition across the country, the government had suspended its decision to allow 100 per cent FDI in multibrand retail.

During the month, the government on recommendations of the FIPB ratified 20 proposals of FDI worth Rs 1,935.24 crore. The approvals include Rs 1,150 crore by Sterlite Grid, to act as an investment company; Rs 230.7 crore by Equitas Micro Finance for demerging its microfinance business with its wholly owned subsidiary; and Rs 200 crore by TV Vision for induction of foreign investment by way of issue of equity shares through an IPO to undertake the business of broadcasting a non-news and current affairs TV channel.

Meanwhile, the ministry has deferred its decision on 23 proposals, including that of Rossell Aviation to undertake business in the civil and defence aviation fields with focus on product-support services, repair and maintenance facility as well as providing training solutions in the project primarily relating to the offset obligation in India to the aviation industry and Alliance Data Pte, Singapore to undertake publishing and printing an Indian edition of a foreign specialty magazine. In all, 10 proposals were rejected.