Will hold consultations on relaxing local sourcing norms for single brand retailers: DPIIT Secy

The DPIIT will hold consultations with stakeholders to discuss ways to further relax local sourcing norms for firms having FDI and undertaking single brand retailing in the country, a top official said.

Secretary in the department for promotion of industry and internal trade (DPIIT) Ramesh Abhishek, however, said there will be no relaxation in the mandatory 30 per cent local sourcing norms.

"We would try to make it more simple for retailers to comply with the provisions of sourcing. There will no change in the 30 per cent thing," he told PTI.

"We will do stakeholder consultation to see what we have to do," he added.

The department would finalise the proposal after the consultations to take approval from the Cabinet.

Last year, it was stated that retailers can show the amount of goods exported from India against meeting the mandatory 30 per cent local sourcing norms.

Retail traders were allowed to adjust the incremental sourcing of goods from India for global operations during the initial five years (beginning April 1 of the year of the opening of first store), against the mandatory sourcing requirement of 30 per cent of purchases from India.

According to a source, there could be some changes in this provision and retailers could be given more time than the present five years.

In 2006, the government had allowed 51 per cent FDI in single brand retail. In January 2018, 100 per cent FDI was permitted for foreign players in single brand retail trade to set up own shops in India without government approval.

That time, the government had relaxed mandatory local sourcing requirement of 30 per cent by stating that a foreign retailer would be able to get credit from incremental rise in sourcing for its global operations from India towards the mandatory 30 per cent local sourcing requirement for its business in the country.

The retail trading sector attracted USD 1.65 billion FDI between April 2000 and March 2019.

Finance Minister Nirmala Sitharaman, in her Budget speech, said the government will ease local sourcing norms for FDI in single brand retail sector.