Apple gets FIPB nod for retail stores, but must meet 30% local sourcing norms

Apple Inc’s proposal to set up wholly-owned retail stores has been approved by the Foreign Investment and Promotion Board, but on the condition that it complies with the 30% local sourcing norms, senior government sources confirmed to Business Standard.
 
“Apple’s application has been cleared but it will have to meet the sourcing norms. The official communication on the matter will be out in a couple of days,” a senior official said.The development comes a week after the Cupertino, California-based company’s CEO Tim Cook visited India and met Prime Minister Narendra Modi.
 
According to current DIPP norms, for single brand retailing, 100% FDI has been allowed provided manufacturers source at least 30% of the value of goods locally. However, this rule has been relaxed for companies which bring cutting edge and state-of-the-art technology to India, subject to government approval.
 
A panel comprising DIPP secretary, a member of the NITI Aayog and representatives of the line ministry decides on giving exemption from sourcing norms on a case-to-case basis. As per reports, this panel has given its approval to the iPhone maker to set up its own stores, including an exemption from the sourcing norms.
 
As per existing norms, any such application then goes to the FIPB, which is led by Economic Affairs Secretary Shaktikanta Das. Sources said that FIPB has kept the sourcing rider intact in Apple’s case.
 
For multi-brand retailing, the government has allowed FDI upto 51% and has mandated that at least 30% of the value of procurement of manufactured/processed products purchased, be sourced from Indian MSMEs.

Courtesy: Business Standards