*When the UPA government announced its ?big bang reforms? about a year ago, foreign retailers like Walmart, Carrefour and Tesco were finally allowed to not just invest, but own a majority stake in Indian multi-brand retail chains.
*While foreign retailers were allowed to own a majority stake of 51%, they had to adhere to a list of stringent norms like sourcing 30% of manufactured and processed goods from SMEs whose investment did not exceed $1 million.
*They were also required to invest 50% of their investments in back-end infrastructure and only allowed to enter cities with a population of over 10 lakh.
*The policy was also on an opt-in basis for states and, at the time, only 10 states had agreed to the FDI norms.
*Despite such norms, political opposition came from all quarters. The government, however, managed to win Parliament vote and ratify the change in December 2012.
*But the work was only half done. Retailers were not keen till there was a further easing of norms. Multiple meetings were held between the commerce ministry and the top brass of Walmart Asia, Tesco and Carrefour as applications were yet to arrive at the Department of Industrial Policy & Promotion (DIPP).
*In June, the DIPP issued certain clarifications. Retailers were told they could continue sourcing from SMEs even after they outgrow the initial investment size. However, expenses in real estate would not be counted towards investment in back-end infrastructure, they were told.
*The DIPP also clarified that investment in back-end infrastructure must be for new infrastructure and even the front-end stores that would be opened would need to be greenfield.
*Key issues on the SMEs? threshold investment size and the mandatory back-end infrastructure investment that was to be calculated on the basis of the first tranche were left to the Cabinet.
*On August 1, the Union Cabinet finally eased the norms for foreign retailers interested in investing in India. Retailers could now source 30% of their manufactured goods from firms where investment was not over $2 million and could keep sourcing from them even after they outgrew the threshold limit.
*The mandatory investment in back-end infrastructure was restricted only to the first tranche, which meant that retailers would only be required to invest $50 million in back-end infrastructure.
*The government also left the decision upon states on whether or not retailers would be allowed to enter towns with population less than 10 lakh.
*Still, despite the changes, so far no application has come in for FDI in multi-brand retail.