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Rediff News  All News  » Business » FDI in single brand retail: Sharma to meet Ravi

FDI in single brand retail: Sharma to meet Ravi

September 11, 2012 17:40 IST

DollarsCommerce and Industry Minister Anand Sharma will meet his Micro, Small and Medium Enterprises counterpart Vayalar Ravi later this week to discuss sourcing norms related to foreign direct investment in single brand retail.

"The Commerce and Industry Minister wants to discuss the issue with the MSME Minister and to find out a solution," a source said.

This will be preceded by a secretary level meeting of the two ministries.

The meeting assumes significance as Swedish furniture retailer IKEA, which plans to invest Rs 10,500 crore (Rs 105 billion) to set up its own stores in India, had sought relaxation in certain conditions related to the mandatory 30 per cent sourcing from micro and small enterprises.

Sharma has ruled out relaxing the 30 per cent sourcing norm for foreign single brand retailers even as the MSME

Ministry has been opposing its relaxation saying it would affect interest of small units.

"Any relaxation which they demand, if it affects my people and industry, I won't accept... We have to protect our MSEs and there is no compromise on that part," Ravi had said earlier.

The Swedish furniture maker has also proposed that the calculation of the 30 per cent norm be done for cumulative periods of 10 years of operations starting with the approval of the present application.

The government has removed 51 per cent cap on FDI in single brand retail.

As per the present single brand FDI policy, global retailers would have to source 30 per cent of their total requirement in one year from Indian small industries.

Besides, IKEA wants the government to allow it to continue sourcing from small units even after the vendors have crossed the mandatory $1 million investment limit and become large set-ups.

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