New Delhi: The entry of retail giant IKEA will help empower small and medium enterprises further, while the government will continue to protect the interests of SMEs, Commerce and Industry Minister Anand Sharma said on Wednesday. (Agencies)
"Our philosophy is SMEs and how their empowerment takes place," Sharma told reporters when asked if the government was considering relaxing the mandatory 30 percent sourcing from small industry for 100 percent FDI in single brand retail.
As per the present single brand FDI policy, global retailers would have to source 30 percent of their requirement from Indian small industries which have a total investment in plant and machinery not exceeding USD 1 million.
IKEA has asked the government to relax norms regarding mandatory sourcing from small units for operating 100 percent controlled single-brand retail business in India.
IKEA has, among other things, sought that it be allowed to continue sourcing from its small vendors even after they have crossed the USD 1 million investment limit.
The minister, however, hinted that meeting the norms should not be a problem for the Swedish firm.
"IKEA is present here for a long time, they have been sourcing from India. 30 percent of their textiles are sourced from India for their global operations. They are sourcing their carpets, entire kitchen and steel range," Sharma said.
He said IKEA is already working with the handloom, handicrafts sector for design, marketing and upgradation of technology.
"They are already doing it...let's not forget that IKEA has enormous global operations worldwide...you have to actually take that into account. So, why people are getting bogged down by numbers, it may be much more than what they are doing already," Sharma said.
The Scandinavian company has proposed to invest Rs 10,500 crore to set up single brand retail stores in India.
Sharma said the government has received three applications for single-brand retail and more are in the pipeline. Besides IKEA, UK-based premium footwear firm Pavers England has also submitted an application.
New Delhi: The entry of retail giant IKEA will help empower small and medium enterprises further, while the government will continue to protect the interests of SMEs, Commerce and Industry Minister Anand Sharma said on Wednesday.