Clarity on sourcing norms to IKEA soon: Sharma
Chandigarh: The government will soon provide clarity to Swedish furniture major IKEA on norms pertaining to mandatory sourcing from local, small suppliers by foreign single brand retailers in India
IKEA plans to invest Rs 10,000 crore in India and has sought clarity on various issues including sourcing.
"Wherever the clarity is required and rationalisation .... The government has assured (to IKEA) that it is open to redress the issues," Commerce and Industry Minister Anand Sharma said when asked about sourcing norms for FDI in single brand retail as demanded IKEA.
IKEA had earlier asked the government to relax norms regarding mandatory sourcing from small units for operating 100 percent controlled single-brand retail business in India. It had said the mandatory sourcing clause from small enterprises remains a challenge for the firm in the long-term.
"Policy has just been put in place...Guidelines will provide clarity," Sharma said, adding that IKEA had said that it would raise sourcing from India from 500 million euros to 1.5 billion euros.
The company had said in the short-term it will comply with the government guidelines, but the definition of small industries needs to be "reviewed" in future.
IKEA currently works with close to 70 suppliers and 1450 sub-suppliers, including many small industries in India.