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The commerce ministry is set to dilute the mandatory 30% sourcing norm for single brand retail sector, a move which would help Swedish home furnishings giant IKEA toinvest in India.
The ministry is now backing the idea that for FDI proposals beyond 51% in the sector, sourcing of 30% of products "preferably be done, from Indian industries, medium and small scale enterprises, and cottage industries and craftsmen in all sectors where it is feasible". This means that the global retailers now have some flexibility for sourcing their products against the previous proposal which made it mandatory to source 30% from the small scale sector.
The amount of domestic sourcing would be self certified by the firm which would then be audited by statutory auditors. The proposal to amend the existing condition relating to mandatory sourcing for allowing up to 100% foreign direct investment in the single brand retail sector is expected to be placed before the Cabinet for approval soon, sources said.
SOURCE:http://timesofindia.indiatimes.com/business/india-business/Govt-set-to-dilute-30-sourcing-guidelines/articleshow/15919659.cms
The ministry is now backing the idea that for FDI proposals beyond 51% in the sector, sourcing of 30% of products "preferably be done, from Indian industries, medium and small scale enterprises, and cottage industries and craftsmen in all sectors where it is feasible". This means that the global retailers now have some flexibility for sourcing their products against the previous proposal which made it mandatory to source 30% from the small scale sector.
The amount of domestic sourcing would be self certified by the firm which would then be audited by statutory auditors. The proposal to amend the existing condition relating to mandatory sourcing for allowing up to 100% foreign direct investment in the single brand retail sector is expected to be placed before the Cabinet for approval soon, sources said.
SOURCE:http://timesofindia.indiatimes.com/business/india-business/Govt-set-to-dilute-30-sourcing-guidelines/articleshow/15919659.cms