Schedule I explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Serial numbers 15.4 and 15.5 close the trading entry of the sectoral Table in Schedule I to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. Multi brand retail trading (MBRT) is the most heavily conditioned entry in the Table: a cap of 51%, the Government route, a minimum investment, back-end infrastructure and sourcing tests, and a list of States. The second entry, for shops in customs bonded areas at international airports, seaports and land customs stations, is open on the automatic route. The Rules are made under clauses (aa) and (ab) of sub-section (2) of section 46 of the Foreign Exchange Management Act, 1999.
This article states the position as per the Rules notified on 17 October 2019 (S.O. 3732(E)) as amended by the notifications named in this article; the latest amendment consulted is S.O. 4870(E) dated 2 September 2026. Later amendments, press notes and sector regulators' conditions should be checked before acting. Retail proposals on the Government route need careful preparation, and our FEMA advisory team can help.
Multi brand retail trading: 51%, Government route. The minimum foreign investment is USD 100 million; at least 50 percent of the first tranche must go into back-end infrastructure within three years; at least 30 percent of manufactured or processed products must be sourced from Indian micro, small and medium industries; outlets may be set up only in cities with a population of more than 10 lakh in States or Union territories that have agreed. Retail trading by e-commerce is not permissible for such companies. Shops in customs bonded areas at international airports, seaports and land customs stations: hundred per cent, automatic route, with no retail in the Domestic Tariff Area.
The entries as the Table prints them
| Serial number | Sector or activity | Sectoral cap | Entry route |
|---|---|---|---|
| 15.4 | Multi Brand Retail Trading (MBRT) | 51% | Government |
| 15.4.1 | Other conditions (a) to (j) | - | - |
| 15.4.2 | List of States and Union territories | - | - |
| 15.5 | Shops set up in custom bonded area at international airports or international seaports and land custom stations (duty-exempt shops) | Hundred per cent | Automatic |
| 15.5.1 | Other conditions (a) to (c) | - | - |
The Table prints the cap for serial number 15.5 as a percentage figure; it is written in words here. The Table uses a different, two-word heading for serial number 15.5; this article calls them duty-exempt shops or shops in customs bonded areas.
Amendments. Both serial numbers stand as notified on 17 October 2019; none of the 19 amending notifications up to 2 September 2026 changes them.
Serial number 15.4.1: the ten conditions for MBRT
(a) Unbranded produce. Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry, fishery and meat products, can be unbranded.
(b) Minimum investment. The minimum amount to be brought in as foreign investment would be USD 100 million.
(c) Back-end infrastructure. At least 50 percent of the total foreign investment brought in the first tranche of USD 100 million shall be invested in "back-end infrastructure" within three years. Back-end infrastructure includes capital expenditure on all activities excluding that on front-end units: for instance, investment towards processing, manufacturing, distribution, design improvement, quality control, packaging, logistics, storage, warehouse and agriculture market produce infrastructure. Expenditure on land cost and rentals, if any, is not counted. Subsequent investment in back-end infrastructure is made by the retailer as needed, depending on its business requirements.
(d) Sourcing. At least 30 percent of the value of procurement of manufactured or processed products purchased shall be sourced from Indian micro, small and medium industries which have a total investment in plant and machinery not exceeding USD 2 million. That value is the value at the time of installation, without providing for depreciation. "Small industry" status is reckoned only at the time of first engagement with the retailer, and the industry continues to qualify even if it outgrows the USD 2 million investment during its relationship with the retailer. Sourcing from agricultural co-operatives and farmers co-operatives is also counted. The requirement is to be met in the first instance as an average of five years' total value of the manufactured or processed products purchased, beginning 1st April of the year during which the first tranche of foreign investment is received, and thereafter on an annual basis.
(e) Self-certification. The company self-certifies compliance with conditions (b), (c) and (d), which could be cross-checked as and when required; investors shall maintain accounts duly certified by statutory auditors.
(f) Location. Retail sales outlets may be set up only in cities with a population of more than 10 lakh as per the 2011 Census, or any other cities as per the decision of the respective State Governments, and may also cover an area of 10 kms around the municipal or urban agglomeration limits of such cities. Retail locations are restricted to conforming areas as per the Master or Zonal Plans of the cities, and provision is to be made for requisite facilities such as transport connectivity and parking.
(g) Procurement. The Government shall have the first right to procure agricultural products.
(h) An enabling policy. The policy is an enabling policy only; the State Governments or Union Territories may take their own decisions on its implementation. Retail sales outlets may therefore be set up in those States or Union Territories which have agreed, or agree in future, to allow foreign investment in MBRT. Future agreement is conveyed to the Government of India through the Department of Industrial Policy and Promotion, and additions are made to the list. Outlets must comply with applicable State or Union Territory laws or regulations, such as the Shops and Establishments Act.
(i) No e-commerce. Retail trading, in any form, by means of e-commerce is not permissible for companies with foreign investment engaged in multi-brand retail trading.
(j) Processing of applications. Applications are processed in the Department of Industrial Policy and Promotion, to determine whether the proposed investment satisfies the notified guidelines, before being considered for Government approval.
The department is named as printed in 2019. The Rules print no further procedure or time line.
Serial number 15.4.2: the States and Union territories
The Table lists: Andhra Pradesh, Assam, Delhi, Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka, Maharashtra, Manipur, Rajasthan, Uttarakhand, and Daman and Diu and Dadra and Nagar Haveli (Union territories).
The list is as printed on 17 October 2019 and uses the names of States and Union territories as they then stood. Condition (h) says additions are made to the list when a State conveys its agreement; no amending notification up to 2 September 2026 adds to or removes from the printed list. The current position in a particular State should be confirmed before acting.
Serial number 15.5: duty-exempt shops in customs bonded areas
The cap is hundred per cent and the route is automatic. Three conditions are printed in serial number 15.5.1:
(a) Meaning. Such shops mean shops set up in custom bonded area at International Airports or International Seaports and Land Custom Stations where there is transit of international passengers.
(b) Customs law. Foreign investment in them is subject to compliance of conditions stipulated under the Customs Act, 1962 and other laws, rules and regulations.
(c) No domestic retail. The entity shall not engage in any retail trading activity in the Domestic Tariff Area of the country.
MBRT and the other retail entries compared
| Point | Single brand retail (15.3) | Multi brand retail (15.4) | Customs bonded area shops (15.5) |
|---|---|---|---|
| Cap | Hundred per cent | 51% | Hundred per cent |
| Route | Automatic | Government | Automatic |
| Minimum investment | None printed | USD 100 million | None printed |
| E-commerce | Permitted on conditions | Not permissible | Not addressed; no retail in the Domestic Tariff Area |
See our article on single brand retail trading for serial number 15.3, and automatic route and Government route for the routes.
A worked example
Calloway Stores Inc plans to hold 51% of Annapurna Supermarkets Private Limited, which will sell many brands of groceries and household goods. This is MBRT: Calloway needs Government approval and must bring in at least USD 100 million. Of the first tranche of USD 100 million, at least 50 percent must be invested in back-end infrastructure, such as warehouses and logistics, within three years; land cost and rentals do not count. At least 30 percent of manufactured or processed products must be sourced from Indian micro, small and medium industries, measured as a five-year average at first. Annapurna may open outlets only in a city with a population above 10 lakh, in a State or Union territory on the list, and may not sell through e-commerce.
Separately, Portside Retail Pte Ltd forms an Indian company to run a shop in the customs bonded area of an international airport. Serial number 15.5 applies: hundred per cent, automatic route. The company must comply with the Customs Act, 1962 and may not retail in the Domestic Tariff Area.
Need help with a multi brand retail proposal?
The investment floor, the back-end spend, the sourcing average and the State's consent each need evidence. Our FEMA advisory team puts the proposal together against the ten conditions of serial number 15.4.1.
Key takeaways
- MBRT: 51%, Government route.
- Minimum foreign investment: USD 100 million; 50 percent of the first tranche into back-end infrastructure within three years.
- 30 percent sourcing from Indian micro, small and medium industries with plant and machinery not exceeding USD 2 million.
- Outlets only in cities above 10 lakh population, in States or Union territories that have agreed.
- No retail trading by e-commerce for MBRT companies with foreign investment.
- Shops in customs bonded areas: hundred per cent, automatic route, with no retail in the Domestic Tariff Area.
Read next
- Serial number 15.3 of the Table: single brand retail trading
- Serial numbers 15.1 and 15.2 of the Table: wholesale trading and e-commerce
- Serial numbers 16 and 17 of the Table: pharmaceuticals and railway infrastructure
- FDI sectoral caps: an overview chart
Disclaimer: Based on the Gazette text of the instrument this article names, as notified and as amended by the notifications named in the article (for the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 the latest amendment consulted is S.O. 4870(E) dated 2 September 2026), as consulted on 2 October 2026. There is no official consolidated text; the provisions were read with each amendment applied. Sectoral caps, entry routes, conditions, forms and time limits change by notification, press note and circular; later changes should be checked on the Gazette, DPIIT and Reserve Bank sites. This article is general information, not legal advice; check the official text before acting.