The government’s decision to relax mandatory 30 per cent local sourcing norms has come as a shot in the arm for global brands in India, according to media reports.
The decision earlier this month allows mass brands including Swedish home furnishing major Ikea to comply with such sourcing norms from the day their first store opens rather than from when the first tranche of investment is made.
Ahead of the government’s announcement, Ikea which has committed for Rs 12,500 crore investment in India, had sought relaxation for five years over mandatory 30 per cent local sourcing norms from opening of its first store in India.
In a statement, Ikea had said it needs some time “to build a sustainable and long term sourcing solutions” to source raw material, find local entrepreneurs and create industrial set ups.
The government’s announcement also included allowing foreign single-brand entities to sell products through online channels provided they have permission to sell through brick-and-mortar stores.
The relaxation in foreign direct investment norms will cheer companies including tech major Apple, which was earlier expected to source 30 per cent of its products locally.