Namrata Kath Hazarika | 04 Sep, 2012
Commerce and
Industry Minister Anand Sharma today clarified that the government is not
considering any proposal to do away with the mandatory 30 percent SME sourcing
norm for Foreign Direct Investment (FDI) in single brand retail.
"We are not talking
of any dilution. We are talking of clarity," he said in the sidelines of a
FICCI event on India-Pakistan dialogue in New
Delhi.
He added, "We are
clear that 30 percent of the sourcing has to be done from India and
primarily from the SMEs."
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.
On this, Sharma
said that IKEA has been already sourcing from India close to 1 billion euros. And
it covers mainly the handloom clusters, artisan clusters, carpet clusters and
primarily MSMEs.
"The cabinet
decision has been taken and if there is any clarity required we will do that," he further pointed out.
Recently, MSME
minister Vayalar Ravi had said that the government is not going to give
relaxations to foreign firms in single brand retail as FDI in retail.
"Thirty percent procurement norm from SMEs in retail FDI policy is meant
for the welfare of them (SMEs). Any relaxation which they (foreign firms)
demand, if it affects my people and industry, I won't accept," he had said.
