To increase the inflow of FDI and attract big firms such as Apple, the Indian government is considering to ease norms for foreign direct investment (FDI) in the single retail brand.
Among many relaxations, it is said to allow more time to foreign players to comply with regulators and ease mandatory 30 per cent local sourcing norms for single-brand retailers.
As per proposed norms, it has some conditional clauses relaxation to increase the inflow of FDI in the single retail brand. If retailers invest over $200 million, they may be allowed to sell online before setting up physical outlets.
At present, online sales are not allowed before the opening of the physical store, said a PTI report.
As per FDI policy implement last year, 100 per cent foreign investment is permitted but with 30 per cent of the value of the goods sold from the country. This sourcing requirement is currently mandatory for first five years.
The proposal further aims to change with the volume of the investment. If retailers invest $100 million, then they will get 6 years to meet the norms. In case the investments are beyond $200 million or $300 million the retailers will get 8 and 10 years time.
Two years ago, iPhone maker Apple along with four other firms had applied relaxation in the local sourcing norms to set up single-brand retail stores in India. Apple had earlier marked the sourcing norms as difficult to comply within the country.
Meanwhile, FDI in India declined by 11 per cent to around $23 billion during April-Sept 2018-19.