Retail FDI: AEPC for increasing sourcing from SMEs to 50%

Apex apparel body AEPC today asked Commerce and Industry Minister Anand Sharma to increase the mandatory share of domestic sourcing for foreign retailers in multi-brand retail to 50 per cent to protect India's small textile manufacturers.

In a letter to Sharma, Apparel Export Promotion Council (AEPC) President A Sakthivel said that the move would also help garment exporters in the country.

The government has allowed 51 per cent foreign direct investment (FDI) in the multi-brand retail sector. In order to protect the interest of small enterprises, the Cabinet has said that the global retailers will have to procure 30 per cent of their requirement from small units.

"I request to increase the share of domestic sourcing in multi-brand retail by another 20 per cent in order to provide benefit of multi-brand retailing in India. The SME sector would definitely take advantage of this," Sakthivel said in his letter.

He said that if the government does not put mandatory sourcing conditions then the foreign retailers will buy garment and apparels from Bangladesh and sell in their stores here as India allows duty free imports of textile products from that country.

"In order to immediately take advantage of domestic sourcing, it is proposed that additional 20 per cent sourcing can be mandated by the government, which can be procured from the existing garment exporting firms," he said.

He said that Indian garment manufacturing and exporting units have experience in dealing with overseas buyers and have highest standards of products.

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