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India's proposal to ease local sourcing norms hailed

Jul '19
Pic: Shutter Stock
Pic: Shutter Stock
The Indian Government's budget proposal to ease local sourcing norms for foreign direct investment (FDI) in single-brand retail has been hailed by global retailers like H&M and IKEA. The proposal could help attract more foreign investors, experts believe. Finance minister Nirmala Sitharaman, however, did not spell out the changes to be made in the norms.

The FDI policy on single-brand retail trade (SBRT) at present allows a 30 per cent local sourcing, preferably from micro, small and medium enterprises (MSMEs), village and cottage industries, artisans and craftsmen where the FDI exceeds 51 per cent.

Swedish home furnishings major IKEA is committed to increasing local sourcing from India and believes any positive move will encourage FDI and grow the industry even more in the country, IKEA India chief executive officer Peter Betzel told a news agency.

H&M India country manager Janne Einola expressed happiness over the government’s intent to drive ease of doing business.

Deloitte partner Anil Talreja saw the announcement as clearly laying out the carpet once again for the global single brand retail companies in India. Many of these companies were sitting on the border in a dilemma over investment in the Indian market on account of difficulty in meeting these sourcing conditions, he said.

The government has also proposed to consider relaxation in FDI norms in sectors like aviation, media, animation, visual effects, gaming and comics (AVGC) and insurance. (DS)

Fibre2Fashion News Desk – India

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