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No dilution of SME sourcing norm in single brand retail: Anand Sharma
Commerce and Industry Minister Anand Sharma on Tuesday clarified that the Government is not considering to do away the clause pertaining to 30 per cent mandatory sourcing from small and medium enterprises (SMEs).
“We are not talking of any dilution, we are talking of clarity. We are clear that 30 percent of the sourcing has to be done from India and primarily from the SME’s,” he said on the sidelines of a Ficci event.
Recently, there have been media reports saying that the Commerce Ministry might relax the procurement norms in order to encourage foreign firms invest in India.
It was also reported that the Centre had moved a Cabinet note to substantially dilute the controversial local sourcing norms for foreign single-brand retailers that have cast a shadow over IKEA Group’s $1.9-billion investment plans and discouraged foreign players.
Earlier, Swedish furniture firm IKEA, who has moved application for raising FDI up to 100 percent, demanded India to relax norms FDI norms saying that they were not able to comply with the sourcing conditions implemented in the single-brand retail policy. It had asked the government to give a time period of 10 years to fulfill the mandatory condition of sourcing.
He replied on this “Major retailers in the single brand are already sourcing from India. Swedish home furnishing major IKEA source products worth 1 billion euros from India and mainly from handloom and carpet clusters”.
As per the present single brand FDI policy, global retailers would have to source 30 per cent of their requirement from Indian small industries which have a total investment in plant and machinery not exceeding $1 million.
Sharma said “The cabinet decision has been taken and if there is any clarity required we will do that,” he further pointed out.
According to industry experts, brands like Apple and Rolex may not be able to meet the mandatory sourcing requirements.
He also mention that India and Pakistan will soon sign three agreements – on customs co-operation, trade grievances redressal and mutual recognition
Commerce and Industry Minister Anand Sharma on Tuesday clarified that the Government is not considering to do away the clause pertaining to 30 per cent mandatory sourcing from small and medium enterprises (SMEs).
“We are not talking of any dilution, we are talking of clarity. We are clear that 30 percent of the sourcing has to be done from India and primarily from the SME’s,” he said on the sidelines of a Ficci event.
Recently, there have been media reports saying that the Commerce Ministry might relax the procurement norms in order to encourage foreign firms invest in India.
It was also reported that the Centre had moved a Cabinet note to substantially dilute the controversial local sourcing norms for foreign single-brand retailers that have cast a shadow over IKEA Group’s $1.9-billion investment plans and discouraged foreign players.
Earlier, Swedish furniture firm IKEA, who has moved application for raising FDI up to 100 percent, demanded India to relax norms FDI norms saying that they were not able to comply with the sourcing conditions implemented in the single-brand retail policy. It had asked the government to give a time period of 10 years to fulfill the mandatory condition of sourcing.
He replied on this “Major retailers in the single brand are already sourcing from India. Swedish home furnishing major IKEA source products worth 1 billion euros from India and mainly from handloom and carpet clusters”.
As per the present single brand FDI policy, global retailers would have to source 30 per cent of their requirement from Indian small industries which have a total investment in plant and machinery not exceeding $1 million.
Sharma said “The cabinet decision has been taken and if there is any clarity required we will do that,” he further pointed out.
According to industry experts, brands like Apple and Rolex may not be able to meet the mandatory sourcing requirements.
He also mention that India and Pakistan will soon sign three agreements – on customs co-operation, trade grievances redressal and mutual recognition
