FDI easing may help revive growth
A range of economic measures were announced by the government recently to jumpstart and investments and bring the economy back on track.
Single brand retail
Especially in the Single Brand Retail sector (SBRT), easing of FDI norms were significant:
- All procurements made from India by the SBRT entity for that single brand
shall be counted towards local sourcing, irrespective of whether the goods
procured are sold in India or exported.
- The current cap of considering exports for 5 years only is proposed
to be removed, to give an impetus to exports.
- It has been decided that ‘sourcing of goods from India for global operations’
can be done directly by the entity undertaking SBRT or its group companies
(resident or non-resident}, or indirectly by them through a third party under
a legally tenable agreement.
- It has been now decided that entire sourcing from India for global
operations shall be considered towards local sourcing requirement.
(And no incremental value)
- It has therefore been decided that retail trading through online trade can
also be undertaken prior to opening of brick and mortar stores, subject to
the condition that the entity opens brick
Coal and lignite sectors
The coal and lignite sectors also witnessed a relieve, as 100% FDI is now allowed under the automatic route for:
- Sale of coal
- Coal mining activities including associated processing infrastruture, which includes
- coal washery
- coal handling
The easing of SBRT have removed bottlenecks that has kept global brands such as Apple from entering India.
Apple produces phones through its contract manufacturers Foxconn and Wistron in Taiwan. According to the existing policy, local sourcing by Foxconn won’t count towards the US tech giant’s sourcing obligations.
With the new easing of the rules, Apple has proposed to open retail stores in India
Source – Bottleneck removed for Apple
Source – apple proposes to open retail stores in India