HG,FDI and FII are two different types of investements by foreign investors.In the case of FDI,foreign investors will directly set up their shops in India like pepsi,cola,however in the case of FII they just buy the shares of publicly listed companies.For country’s growth and liquidity FDI is more preferred than FII.Reason being FIIs can buy and dump the shares within short period of time but FDI’s like pepsi cannot shut the shop overnight and leave the country.
In the case of FIIs,by default the limit is capped at 24% for the listed companies in India(except for public sector which is at 20%).After that if the sectoral cap allows,the company after getting its approval from the shareholders and board,can apply to RBI for increasing the limit.If it gets approved,it paves the way for more FII inflows into the company.
Current list of FII limit for each company is given in RBI page:
It states FII ceiling of 24% has been reached and no further purchases are allowed for V-mart.To answer your question about the secotral cap for FII in retail,it is still not clear to me what is the current limit.
Hope this helps.I will keep posted if i get additional information.