New Delhi, Jan. 10: The government today lifted the restrictions on global chains such as Adidas, Louis Vuitton, Gucci and Nike that limited them from having full ownership of their Indian operations.

In a notification, the government allowed 100 per cent FDI in single-brand retail against 51 per cent now. The move comes into effect immediately

However, to promote the growth of domestic industry, the government said the foreign retailers must source 30 per cent of their goods from small and cottage industries, which have a maximum investment in plant and machinery of $1 million (about Rs 5 crore).

“This step will provide stimulus to domestic manufacturing value addition and help in technical upgradation of our local small industry,” commerce minister Anand Sharma said.

“Foreign direct investment up to 100 per cent, under the government approval route, would be permitted in single-brand product retail trading,” a press note by the Department of Industrial Policy and Promotion said.

According to the riders, the products by the global chains should be of “single brand” only and be sold under the same brand internationally.

Removal of the investment cap will help global fashion brands to strengthen their presence — giving them the option to buy out their domestic joint venture partners.

The decision to increase FDI in single-brand retail was taken by the cabinet on November 24 along with the opening up of multi-brand retail to overseas investments.

However, the government was forced to put on hold its proposal of 51 per cent FDI in multi-brand retail because of opposition by several political parties.

Rajan Bharti Mittal, vice- chairman and managing director of Bharti Enterprises, said the move had “a clear potential to lift the general mood in the economy. Increased investments by foreign single brand retailers will not only help improve consumer choice but also enhance competitiveness of Indian enterprises through access to global designs, technologies and management practices”. Bharti Enterprises has a partnership with multi-brand retail giant Walmart in the country.

“Sourcing at least 30 per cent of the products from micro and small enterprises will benefit a large number of businesses. We hope political consensus will soon be evolved in multi-brand retail as well,” Assocham secretary-general D.S. Rawat said.