India's sourcing clause for single brand retail well thought-out: Sharma

New Delhi, Feb 1 (PTI) The Indian government today virtually ruled out revisiting a sourcing condition on 100 per cent FDI in single-brand retail, stating the decision on 30 per cent mandatory procurement from the domestic small enterprises is well thought-out. "I think, it is a well-considered policy and surely sourcing from within the country and small and medium units is something which is very healthy. It would only be the experience which will tell how rewarding it will be for the investors and the small enterprises," India's Commerce and Industry Minister Anand Sharma said. He made these comments while talking to reporters on the sidelines of a function here a day after he met CEO of Swedish furniture IKEA Mikael Ohlsson in Paris. According to a Commerce Ministry statement, Ohlsson had shared his views on the local sourcing clause in the FDI policy with regard to single-brand retail. IKEA has already stated that the sourcing clause might be difficult to implement. The Indian government recently notified opening up of single-brand retail for 100 per cent FDI, with a clause that in case foreign ownership increases beyond 51 per cent, 30 per cent local sourcing from the small units in the country would be mandatory. Apprehensions have been expressed on the rule since in several areas, the domestic small vendors may not have the required skill and and capabilities to be suppliers of global scale in terms of capacity and quality. A unit is considered small in India if its investment in plant and machinery is not beyond Rs 50 million (USD 1.0 million). PTI