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2013-07-24

Cannot meet 30% sourcing clause from small industries: Wal-Mart

The world’s largest retailer Wal-Mart has expressed its inability to the government on meeting the sourcing norm in the multi-brand segment that requires 30% procurement from small industries, stating it can procure only about 20%.

The world’s largest retailer Wal-Mart has expressed its inability to the government on meeting the sourcing norm in the multi-brand segment that requires 30% procurement from small industries, stating it can procure only about 20%.

 

According to sources, the representatives of the company had met department of industrial policy and promotion (DIPP) officials in the second week of this month and informed about the company’s stand on the contentious sourcing issue.

 

The Walmart India spokes-woman said, “We are still very early in the process on FDI but are excited by the opportunity in front of us. We continue to work with the government to better understand the rules that exist for FDI.”

 

As per the foreign direct investment (FDI) policy for multi-brand retail trading, at least 30% of the value of procurement of manufactured/processed products shall be sourced from Indian ‘small industries’.

 

Several global retailers have raised their concerns over the sourcing restriction.

 

In a meeting with commerce and industry minister Anand Sharma, the global chains have flagged the issue and have demanded to alter the condition to ‘preferably’ from ‘mandatory’ as in the case of single brand retail.

 

Although the government has permitted 51% FDI in multi-brand retail about 10 months back, no formal proposal has been received by the DIPP yet.

 

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