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India integrated itself to laws prevailing at international level, new norms to give certain place in global value chain: Piyush Goyal

File photo: Piyush Goyal Photograph:( ANI )

ANI New Delhi, India Aug 29, 2019, 12.34 PM (IST)

Union Commerce and Industry Minister Piyush Goyal has hailed the Cabinet decision to liberalise sourcing norms for single-brand retail.

"The big companies of single-brand retail have put up small factories in India. They are not able to get economies of scale. They cannot get contract manufacturing done from third parties. Their domestic sourcing too remains limited," he said.

India has integrated itself to the laws prevailing at an international level. The new norms will give India a certain place in the global value chain, he said.

"Going forward, this holistic and comprehensive approach will encourage exports, Foreign Direct Investment (FDI) will come in bigger numbers, and big manufacturing opportunities which is the need of the hour will come," said Goyal on Wednesday.

The new norms will give a boost to the Make in India initiative. "For that, this is an important decision," he said.

The Union Cabinet liberalised sourcing norms for single-brand retail and allowed 26 per cent FDI in the digital media. It also decided that single-brand retail trading entities can do retail online trade prior to the opening of brick-and-mortar stores.

Goyal had said the decisions have been taken to make the country an attractive destination for FDI. Referring to the decision to ease local sourcing norms for FDI in Single Brand Retail Trading (SBRT), he said that it had been announced in the Union Budget.

"This will lead to greater flexibility and ease of operations for SBRT entities besides creating a level-playing field for companies with higher exports in a base year," he had said.

The minister said that extant FDI Policy provides that 30 per cent of the value of goods has to be procured from India if SBRT entity has FDI more than 51 per cent. As regards local sourcing requirement, the same can be met as an average during the first five years and thereafter annually towards its India operations.

"It has been decided that all procurements made from India by the SBRT entity for that single brand shall be counted towards local sourcing, irrespective of whether the goods procured are sold in India or exported. The current cap of considering exports for five years only is proposed to be removed, to give an impetus to exports."

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'Going forward, this holistic and comprehensive approach will encourage exports, FDI will come in bigger numbers, and big manufacturing opportunities which is the need of the hour will come,' Goyal said.