The government is set to issue fresh guidelines that will clearly stipulate that international chains entering India through the ‘single-brand’ retail window can use multiple trademarks to sell their goods.

Existing guidelines allow products to be sold under “single brand only” and also stipulate that the same brand should be used in markets other than India. The rules were framed over six years ago when the government opted to open a limited window in the retail segment amid stiff opposition to multi-brand retail.

The stipulation has raised policy headaches for the government as it discovered that entities such as Marks & Spencer are using multiple brands such as Indigo, Autograph and M&S. In fact, some government departments have also raised the issue, prompting the department of industrial policy and promotion, which is the agency responsible for foreign direct investment policy, to consider a set of clarifications to clear the air. Even other retailers like H&M that are entering India use multiple brands, such as Cheap Monday and Monki. Even Zara faces similar hurdles.

“The issues were not thought through when the guidelines were framed. Companies will use multiple trademarks even if they come through the single-brand route as it results in product differentiation. As long as the trademarks belong to the company (that comes through the single-brand window), there should not be any concern,” a senior government official told TOI on the condition of anonymity.

Another officer said the department may even approach the Union Cabinet to get a green light for the clearance. “The idea is to facilitate the entry of international players so that our domestic manufacturing base improves,” said an official.

The government allowed FDI in single-brand in 2006 with the rider that sourcing has to be done locally. While several players entered the market, the rush did not start until last year after 100% foreign direct investment was allowed and the local purchase clause was dispensed with. Several new players led by Swedish furniture retailer IKEA have now got permission to set up stores.

The fresh set of clarifications on single-brand retail follow a similar exercise for the multi-brand segment, which has failed to attract any international investor although players such as Walmart, Tesco and Carrefour have been waiting to enter the segment for several years now. They, however, complain that the clarifications issued earlier this month have only made life more difficult, prompting commerce & industry minister Anand Sharma to convene a meeting with supermarket chains next week.