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US urges India to relax local sourcing norms

The US has asked India to consider relaxing local sourcing norms in single-brand retail trade to help American companies such as technology major Apple. The issue was highlighted at a meeting between Commerce and Industry Minister Nirmala Sitharaman and US Trade Representative Michael Froman. However, India pointed to reforms in foreign direct investment (FDI) norms that allow relaxation in local sourcing norms in specific cases. In July last, the government had announced relaxation of FDI norms by giving a three-year exemption to foreign players from local sourcing in single-brand retailing and a five-year relaxation for companies providing cutting edge technology. But companies like Apple had sought a blanket exemption.

After the rules were relaxed, Apple has not approached the commerce ministry yet. At present, 100 per cent FDI is permitted in single-brand retailing, but it requires 49 per cent permission from the Foreign Investment Promotion Board. India has pushed for a greater market access for agricultural export as well as institutional mechanisms to improve food export.