Make foreign retailers source 50% from MSMEs: AEPC

20 Sep '12

1 min read

In view of Government of India’s proposal to relax norms for entry of Foreign Direct Investment (FDI) in the multi-brand retail sector, Apparel Export Promotion Council (AEPC), the country’s apex apparel body, has suggested that foreign retailers should be made to source up to 50 percent of their requirements from micro, medium and small scale enterprises (MSMEs), so as to safeguard the interest of the domestic producers.

AEPC said it would raise the issue with Union Commerce and Industry Minister Anand Sharma.

Last week, the Government relaxed the 30 percent mandatory sourcing requirement for FDI in single-brand retail, however, FDIs in multi-brand retail would be required to source 30 percent of their requirements from MSMEs.

AEPC said it would urge the Government to raise the sourcing requirement for multi-brand retailers from 30 percent to 50 percent, as it would help the local industry and also push domestic production.

If mandatory sourcing conditions are not enforced, foreign retailers would procure garments and apparels from Bangladesh, and put up the same for sale in their Indian stores, as India allows zero-duty imports of textile items from Bangladesh. This would severely impact the domestic producers and the industry at large, he warned.

Fibre2fashion News Desk - India

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