new delhi the reserve bank of india rbi and the finance ministry have sought clarity in the policy on portfolio investments in multibrand retail sector which could help listed domestic players such as futures retail raise foreign investment limit under the current rules investment by foreign institutional investors fiis can go up to 24 in a listed company and can be further raised up to the sectoral foreign direct investment fdi limit through a board resolution endorsed by the shareholders of the company in the normal course this can be done with a simple rbi approval but in the case multibrand retail fdi in which is on the approval route policymakers want to tread with caution in september last year government allowed 51 fdi in the multibrand retail sector but said prior permission of the government is required the policy needs to state the stand on portfolio investments in the sector said a government official privy to the communication the rbi and the finance ministry have asked the department of industrial policy and promotion dipp to clarify the situation the central bank itself has favoured automatic route for such investments on the lines of practice followed in other sectors futures retail had submitted its application to the fipb in april to raise seeking increase in fii investment limit to 49 but is yet to secure its clearance due to lack of clarity in the policy the company has now represented to finance minister p chidambaram for a decision on the issue fiis currently hold 2489 stake in the future retail higher limit for fiis in the company could create demand for the companys shares foreign retailers who want to set up retail stores in india have to mandatorily invest at least 50 of the total fdi brought in backend infrastructure in setting up the supply chain for front end stores foreign retailers also have to adhere to minimum sourcing requirement from small and medium enterprises moreover any entity with fdi can only set up shop only in those states that have allowed fdi in retail image courtesy flickr et bureau published on sep 11 2013 at 0716 am ist telegram facebook copy link be the first one to comment comment now comments comment now read comment 1 all comments post post find this comment offensive choose your reason below and click on the submit button this will alert our moderators to take actions reasons for reporting foul language defamatory inciting hatred against a certain community out of context spam others report join the community of 2m industry professionals subscribe to our newsletter to get latest insights analysis download etretail app get realtime updates save your favourite articles scan to download app p chidambaram foreign direct investment fdi multi brand retail foreign retailers retail india homenewsmultibrand retail rbi finmin seek clarity on portfolio investments