Easing Local Sourcing Norms In Single Brand Retail To Help Companies Firm up investments: Experts

Finance Minister Nirmala Sitharaman in her Budget speech said "local sourcing norms will be eased for FDI in single brand retail sector". It has also proposed to consider relaxation in the FDI norms in sectors such as aviation, media, AVGC (animation, visual effects, gaming and comics) and insurance.

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New Delhi: The government's decision to relax local sourcing conditions for foreign direct investment (FDI) in single brand retail trading would provide a certainty to companies that are looking to invest in the sector, experts say. Deloitte Partner Anil Talreja said, while it would depend on the exact details of the relaxation of sourcing norms, the announcement is clearly laying out the carpet once again for the global single brand retail companies in India. Many of these companies were sitting on the border in a dilemma over investment in the Indian market on account of difficulty in meeting these sourcing conditions, he said "These companies will certainly have to re-look at their strategy to tap the large Indian consumption potential. It would now be a race for all these retail companies to evaluate the conditions and take a quick decision to invest into India," he said. India Cellular and Electronics Association Chairman Pankaj Mohindroo said that single brand retail adds to the country's economy and does not in anyway upset the equilibrium of the organic retail. "By its core character, single brand retail promotes the brand, enhances retailing standards, keeps the sanctity of price which does not exert predatory pressure on our small retailers intact," he said. The government Friday proposed to further relax FDI norms in the single brand retail sector with a view to attract more overseas investment. Finance Minister Nirmala Sitharaman in her Budget speech said "local sourcing norms will be eased for FDI in single brand retail sector". It has also proposed to consider relaxation in the FDI norms in sectors such as aviation, media, AVGC (animation, visual effects, gaming and comics) and insurance. Commenting on this, Jehil Thakkar, Partner, Deloitte, said greater investment in media and animation services is key to taking advantage of the opportunities created by the drop in data charges. "Greater investment in animation will also serve to make India a hub for animation and visual effects globally," he added.