Govt. plans to impose stringent sourcing norms: source

Govt. plans to impose stringent sourcing norms: source The government is mulling over plans to impose stricter conditions to make foreign retailers like furniture giant IKEA to follow proper sourcing norms, a government official with direct knowledge of the development revealed.

IKEA proposes to have two separate divisions - one for front-end stores and another for sourcing in India, while the cautious government wants to make sure that these retailers don’t depend on cheaper imports from foreign countries.

Speaking on the topic, the government official said, “The Company will have to ensure that the separate entity it floats for sourcing of products sources them from India and does not rely on cheaper imports from other countries.”

Earlier, the Foreign Investment Promotion Board (FIPB) had slashed the number of products that the retailer can sell in the country and also turned down its proposal to open food cafes at its stores.

The government had tweaked sourcing norms to attract more and more retailer but now the government is determined that all norms are fulfilled by retailers in letter and spirit.

Swedish furniture giant IKEA has already gained FIPB’s permission for Rs 10,500-crore investment plan in India.