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<h1>Foreign direct investment conditions require local sourcing from MSMEs, shaping access to capital and technology.</h1> Foreign Direct Investment permits 100 percent FDI in single brand retail subject to a local sourcing obligation that proposals beyond majority foreign equity must source a portion of goods from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen. FDI is framed as complementary to domestic investment, providing SMEs access to capital, advanced technologies, managerial practices and global market integration, while FDI in MSEs remains subject to sectoral caps, entry routes and other sectoral regulations.