NEW DELHI – India’s Department for Promotion of Industry and Internal Trade said foreign retailers can now meet local sourcing requirements by buying goods produced in units in Special Economic Zones.

Wistron and Foxconn are expected to benefit, having India facilities located in SEZs.

One hundred percent of foreign direct investment is permitted in single-brand retail. If foreign investment exceeds 51%, the 30% mandatory local sourcing norm applies. Earlier, the SEZ sourcing issue wasn’t clearly defined.

“As regards, sourcing of goods from units located in SEZs in India, it may be clarified sourcing of goods from such units would qualify as sourcing from India for the purpose of 30% mandatory sourcing from India for proposals involving FDI beyond 51%, subject to SEZ Act, 2005,” DPIIT said.

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