In an evident attempt to provide clarity on regulations pertaining to retail FDI, department of industry policy and promotion (DIPP) will be issuing a set of clarifications so as to address the concerns related to foreign investment in multi-brand retail. As per a DIPP official, the advisory is likely to be issued by the department in the next few days.

The clarifications which the DIPP is set to release on the retail FDI norms - which range from investment in back-end infrastructure to sourcing from farmers and small and medium enterprises (SMEs) - will cheiflt be based on the queries that have been raised by several prospective investors, including the likes of Walmart, Tesco, and Carrefour.

Despite the fact that the retail FDI regulations specify that at least one-half of the investment has to be in back-end infrastructure, the advisory to be issued by the DIPP will clarify to the investors that land purchase and lease rentals would not qualify for the purpose. However, the investment which the investors make for constructing warehouses would be included.

Specifically speaking, the DIPP advisory will clarify that an initial investment of only $50 million will go towards the creation of back-end infrastructure; and that the second and subsequent tranches - which would comprise "incremental investment" - will not be accompanied by the stipulation that 50 percent investment has to be allocated for setting up a backbone.

Other than the clarity on the mentioned retail FDI norms, the DIPP advisory will also issue a set of clarifications related to local sourcing requirements.