Retail in Asia

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Firms might get more time to comply with 30pc sourcing in India

The clause on mandatory sourcing from India, part of the single-brand retail policy, might be tweaked again. About three years after 100 percent foreign direct investment (FDI) was permitted in single-brand retail by the United Progressive Alliance (UPA) government, there are indications that the sector might get more time to implement the contentious sourcing norm.

Currently, a company with more than 51 percent FDI and seeking to operate under a single-brand banner has to start complying with the 30 percent sourcing norm within five years of the entity getting incorporated in the country.

The sector wants the sourcing clause to kick in five years after a company sets up its first store. It is learnt the government is considering relaxing the rulebook in a bid to implement "ease of doing business".