Government Eases Local Sourcing Norms For FDI In Single-Brand Retail

The government on Wednesday eased local sourcing norms for single-brand retail, providing relief to foreign brands including Apple Inc. and Ikea.

All procurement made from India, including previous sourcing, by manufacturers will be counted as local sourcing to meet the mandatory 30 percent requirement, Commerce Minister Piyush Goyal said, adding that exports would be part of local sourcing norms against just domestic sales earlier. This, Goyal said, will lead to larger capacities and more investments.

The government said it will also allow single-brand retailers to start online stores that are yet to establish a brick-and-mortal store, but meet the 30 percent local sourcing norm.

Goyal said setting up an Indian facility takes time, and to ease operations companies can start online sale of their products instead the mandatory requirement of setting brick-and-mortal stores first before starting online retail.

Other sectors where foreign direct investment has been eased are:

• 100 percent FDI allowed in coal mining and sale through automatic route.
• 100 percent FDI allowed in contract manufacturing through automatic route.
• 26 percent FDI, with government approval, for digital media in news.