Xiaomi’s application for single brand retail grasp by govt.


Chinese handset maker Xiaomi’s application for single brand retail has been put on hold by the government with the company being asked to provide more documents to support its application. The Department of Industrial Policy and Promotion (DIPP) will forward the application ofXiaomi to the “cutting edge panel” once the company submits all the details to be considered for exemption from the 30% sourcing norm, a senior government official told ET.”We are in constant discussion with the department for small clarifications, and have not met any major obstacles to date. We are unable to comment further on the specifics of the application as it is still being processed,” Xiaomi’s spokesperson

Xiaomi had submitted its proposal for single brand retail last month and stated that it be allowed to forego the 30% sourcing norm for a range of products, including Wi-Fi amplifiers, Bluetooth speakers and power banks. China’s number one smartphone maker had applied under the category of “state-of-the-art” technology.As per the revised foreign direct investment ( FDI ) norms announced last year, companies which bring cutting edge and state-of-the-art technology to India can open single brand outlets without meeting the 30% compulsory sourcing of material locally subject to government approval.

A panel comprising Secretary, Department of Industrial Policy and Promotion (DIPP) member of the Niti Aayog and representative of the administrative ministry, including telecom and information technology, will decide on giving exemption from sourcing norms on a case-to-case basis.Technology major Apple has already got a go-ahead from the panel and its proposal is now being considered by the department of economic affairs.Besides Xiaomi , the panel is also considering the application of China-based telecom company LeEco for single brand retail licence with the sourcing exemption.The government allowed 100% FDI in single-brand retail in January 2012. Up to 49% can be made through the automatic route and above that with the approval of the Foreign Investment Promotion Board (FIPB).

Beyond 51% FDI, it is required that 30% of the value of goods be sourced from India, preferably from micro, small and medium enterprises (MSMEs), village and cottage industries, artisans and craftsmen.India has jumped two positions to number 9 and re-entered the top ten rankings in AT Kearney’s 2016 Foreign Direct Investment Confidence Index.FDIs into India touched the “highest ever” mark of $51 billion during April-February of financial year 2015-16. FDI equity inflow recorded a growth of 44% in the 21-month period between June 2014 and February 2016 after the launch of the Make in India initiative, reaching $63.16 billion from $43.87 billion between September 2012 and May 2014.

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