Govt meets MSME ministry to ease FDI norms

The Department of Industrial Policy and Promotion (DIPP) in an attempt to ease the restrictive foreign direct investment norms for single brand retail in India has initiated discussions with the Ministry of MSME and other ministries as well. This includes the government’s condition for foreign brands looking to invest in India through FDI to source 30 per cent of their requirements from Indian SMEs.

The move is seen coming after government took notice of growing criticism from various business quarters that such restrictive investment measures is hampering India’s image of being the most favourable investment destination.

Companies operating in single brand retail business, globally, usually have a complete ownership business model. However, since last year they have been pointing to the restrictive conditions for FDI in India, including the required 30 per cent sourcing clause as a hindrance to their entry.