The Micro, Small and Medium Enterprises (MSME) Ministry today said it has not received any proposal to dilute guidelines related to foreign direct investment in the single-brand retail sector.

Foreign retailers who want to set up 100 per cent single brand retail stores in India have raised concerns over the mandatory condition of 30 per cent sourcing from small and cottage industries.

“There is no proposal with this Ministry at present for diluting FDI guidelines in single brand retail,” MSME Minister Vayalar Ravi said in a written reply to the Rajya Sabha.

Ravi said the guidelines for FDI in retail were approved by the Cabinet with inputs from all ministries concerned.

The Government has eliminated 51 per cent cap on foreign direct investment for single brand retailers like IKEA, Adidas, Louis Vuitton and Gucci.

However, those wanting to take FDI beyond 51 per cent will have to source at least 30 per cent of their merchandise from the domestic micro and small enterprises.

Swedish furniture firm IKEA, which has moved an application for raising FDI up to 100 per cent, has asked the Government to ease the norms for compulsory procurement from the micro and small enterprises. At present, a company up to investment of Rs 5 crore qualifies to be called MSE.

The furniture retailer plans to invest Rs 10,500 crore to set up about 25 stores in India.

In an another reply, Ravi said several suggestions for the amendment to the Micro, Small and Medium Enterprises Act 2006 have been received from various associations.

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