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2012-09-24

Increase sourcing from SMEs in multi-brand retail: AEPC to Commerce Ministry

Apparel body Apparel Export Promotion Council (AEPC) has asked Commerce and Industry Minister Anand Sharma to increase the mandatory share of domestic sourcing for foreign retailers in multi-brand retail to benefit small and medium enterprises (SMEs).

Apparel body Apparel Export Promotion Council (AEPC) has asked Commerce and Industry Minister Anand Sharma to increase the mandatory share of domestic sourcing for foreign retailers in multi-brand retail to benefit small and medium enterprises (SMEs).

A Sakthivel, President, AEPC, in a letter to Sharma asked him to increase the minimum sourcing clause from current 30 per cent to 50 per cent to protect India's small textile manufacturers.

He said that the move would also help garment exporters in the country.

"I request to increase the share of domestic sourcing in multi-brand retail by another 20 per cent in order to provide benefit of multi-brand retailing in India. The SME sector would definitely take advantage of this," Sakthivel said in his letter to Sharma.

The government has allowed 51 per cent foreign direct investment (FDI) in the multi-brand retail sector. In order to protect the interest of small enterprises, the Cabinet has said that the global retailers will have to procure 30 per cent of their requirement from small units.

He said that if the government does not put mandatory sourcing conditions, the foreign retailers will buy garment and apparels from Bangladesh and sell in their stores here as India allows duty free imports of textile products from that country.

"In order to immediately take advantage of domestic sourcing, it is proposed that additional 20 per cent sourcing can be mandated by the government, which can be procured from the existing garment exporting firms," Sakthivel added.

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