Govt to lift local sourcing norms for FDI in single brand retail trade
18 Jul 2019
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India will soon ease mandatory local sourcing norms for foreign investment in single brand retail trading, commerce and industry minister Piyush Goyal has said.
The minster was addressing a gathering of CEOs of multi-national companies at the UK-India Joint Economic and Trade Committee (JETCO) meeting in London on Monday.
At the same time, Goyal asked multinational companies to respect Indian sensitivities on restrictions of foreign investment in multi-brand retail, and the repercussions of opening up the sector on the Indian economy.
In its annual budget for 2019-20, the government has proposed to ease local sourcing norms for foreign direct investment in single brand retail sector.
"India has opened up opportunities for single brand retail and is easing some detrimental clauses of the policy in next few weeks which will help single brand retail come in a bigger way to the country," the minister is reported to have told the gathering of CEOs.
While the existing policy allows 100 per cent FDI in single brand retail trade, there are certain conditions to be fulfilled, which include 30 per cent mandatory local sourcing, preferably from MSMEs.
The minister said retailers, especially those in the e-commerce business, must ensure that regulations governing multi-brand retail are strictly adhered to.
"Particularly, e-commerce companies coming to India will have to ensure that they stay within the letter and spirit of the law when it comes to multi-brand retail and India's policies around that," he said.
He advised British companies to take the manufacturing route, which in India is in a cost-competitive environment.
In India, he said, huge investment opportunities exist in sectors like housing, smart cities, railway stations, gas and telecom grids for UK companies.
"India is looking at huge investments in the areas of housing, smart cities, railway stations, water, gas and telecom grids, transport networks like ports, better logistics and clean energy," he said.
"Design in the UK-Made in India can be the new focus area for this partnership. Similarly, in the services sector, India can provide huge technical expertise to British companies," the minister said.
Further he said if the spirit of research and innovation in British industry and academia is bound together with the strength of the skilled Indian work force, the two countries may become the preferred suppliers for the rest of the world.
He also said that India is now working on improving ease of doing business through putting in place mechanisms.
India Day is a conclave of over 300 financial services industry leaders co-hosted by the Government of UK and the city of London.
Both the countries have agreed on the importance of stable business and regulatory regimes and welcomed the on-going partnership between UK and India on sharing best practices on ease of doing business, said a joint statement issued after the 13th Meeting of India-UK Joint Economic and Trade Committee.
Both countries have agreed to set up three new bilateral working groups to tackle barriers in specific sectors, including food and drink, healthcare and data services.
India-UK trade and economic relations are reviewed annually by JETCO at the level of commerce and industry minister.
