Home / Knowledge / News / Apparel/Garments / Indian govt amends sourcing norms for FDI in retail
Indian govt amends sourcing norms for FDI in retail
Nov '12
Minister of State for Commerce & Industry, Dr. S. Jagathrakshakan, in written reply to a question in Lok Sabha, said vide Press Note 4 (2012 series) issued on 20.09.2012 certain conditions relating to FDI in single brand product retail trading have been amended.
The amended policy, inter-alia, includes the following condition in respect of proposals involving FDI beyond 51% in single brand product retail trading:
“In respect of proposals involving FDI beyond 51%, sourcing of 30% of the value of goods purchased will be done from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen, in all sectors. The quantum of domestic sourcing will be self-certified by the company, to be subsequently checked, by statutory auditors, from the duly certified accounts which the company will be required to maintain.”
“This procurement requirement would have to be met, in the first instance, as an average of five years' total value of the goods purchased, beginning 1st April of the year during which the first tranche of FDI is received. Thereafter, it would have to be met on an annual basis. For the purpose of ascertaining the sourcing requirement, the relevant entity would be the company, incorporated in India, which is the recipient of FDI for the purpose of carrying out single brand product retail trading.” 
The above amended condition is expected to benefit Indian producers, including the Indian handicrafts sector, which provides livelihood to millions and is important from the point of low capital investment, high value-addition and high potential for export, as also to meet the critical need to integrate Indian producers with the domestic and global markets. Skill integration with craftsmen abroad is likely to help develop synergies with international brands and generate more employment. 
The consequential benefits, arising from the integration of global best practices in management, along with global standards in quality, design, packaging and production, are expected to assist in building capacities of local producers, by making it worthwhile for them to scale-up their production, thereby creating a multiplier effect on employment and income generation. 
In respect of Government’s decision to permit 51% FDI in multi brand retail trading, vide Press Note 5 (2012 series) dated 20.09.12, the following condition has interalia been prescribed: 
“At least 30% of the value of procurement of manufactured/ processed products purchased shall be sourced from Indian 'small industries' which have a total investment in plant & machinery not exceeding US $ 1.00 million. This valuation refers to the value at the time of installation, without providing for depreciation."

Must ReadView All

Textiles | On 27th Oct 2016

Garmon Chemicals partakes in Kingpins denim show

Garmon Chemicals, leader in innovative chemical auxiliaries and...

Apparel/Garments | On 26th Oct 2016

SGS develops 4C chemical management model for apparel

SGS, a leading inspection, auditing, certification, testing, and...

Textiles | On 26th Oct 2016

Platinum Equity acquires International Textile Group

International Textile Group (ITG) has been acquired by Platinum...

Interviews View All

Amrit Sethia

‘The intimatewear category in India is slowly becoming trend-sensitive.’

Divyesh Mashruwala
Akshar Industries

Surat dominates foiling, embossing and pleating

Sanjay Yagnik
Maa Tex Speciality

‘We suggest reducing dosage of sizing chemicals to reduce sludge...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Eric Scholler

The Indian market has huge potential in technical textiles, and by far,...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

October 2016

October 2016

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


Advanced Search