As per the new FDI rules, India will allow single brand companies to start online sales even before they set up their brick and mortar stores. This move will encourage leading international high tech and luxury fashion brands such as Apple, Gucci and Louis Vuitton to either set up their exclusive webstores to sell directly to Indian customers or source materials from India through third party manufacturing for their global operations, after India relaxed norms for foreign direct investment (FDI) in single brand retail and contract manufacturing.

The government has also relaxed the stringent 30 percent local sourcing norm for single brand retailers with majority foreign ownership. These companies can now source 30 percent value of their goods sold in India based on a 5-year average in the initial 5-year period.

India has also allowed 100 percent FDI in contract manufacturing. This is expected to attract companies from around the world, including the Middle East, to set up sourcing facilities in India. High tech brands such as Apple and luxury brands such as Louis Vuitton and Gucci could be among the single brand retailers who are expected to enter the Indian market with their own exclusive webstores or to source materials from India through contract manufacturing for their global operations.