The government's decision to relax FDI norms for single brand retail can increase exports of local products. Some of the reluctant retailers can now enter the market by testing the waters through the online channel.

Earlier single-brand retailers with over 51 per cent FDI were required to source 30 per cent of the goods locally. As per the new decision, all procurements made from India by single-brand retailers for that brand shall be counted towards local sourcing, irrespective of whether the goods are sold in India or exported. This sourcing for global operations can be directly by the retailer or its group companies.

"The export capability from this country will dramatically increase when these retailers start buying for their global requirements," said Kumar Rajagopalan, CEO, Retailers Association of India. According to Edelweiss Securities, this will also increase the compliance levels of retailers.

Further, the government has allowed single brand retailers to sell online before they set up physical stores against the earlier norm of mandatory offline store before going online. This will encourage retailers to enter the market by first going online.