Government on Friday eased the sourcing requirements for foreign retail chains looking to invest in the country, removing one of the key barriers that had hobbled the entry of new investment.
Foreign retail chains investing more than 51 percent via foreign direct investment (FDI) in the single-brand sector must still source 30 percent of their products from India, Trade Minister Anand Sharma said on Friday. But the sourcing no longer has to be from small- and medium-sized industries, he said.
The requirement to source from small industries had proved an obstacle for companies such as furniture giant IKEA, which is looking to invest in Asia's third-largest economy.
(Govt allows FDI multi-brand retail. Read https://bsmedia.business-standard.comin.reuters.com/article/2012/09/14/india-economy-retail-fdi-reform-idINDEE88D08M20120914)