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  Business   In Other News  06 Jul 2019  Union Budget 2019: Easier sourcing norms for single brand retail

Union Budget 2019: Easier sourcing norms for single brand retail

THE ASIAN AGE. | SANGEETHA G
Published : Jul 6, 2019, 2:23 am IST
Updated : Jul 6, 2019, 2:23 am IST

The budget proposed opening up of aviation, media and insurance while easing FDI norms in single brand retail.

There is a huge gap between the technology used by the insurers and the surveyors.
 There is a huge gap between the technology used by the insurers and the surveyors.

Chennai: Relaxation in the sourcing norms for single brand retailers will be music to the ears of some of mobile phone brands like Apple and One Plus which are aggressive in the Indian market. Further, 100 per cent FDI for insurance intermediaries will strengthen the overall insurance market.

Buoyed by the growth in foreign direct investments despite global headwinds, the government wants to further open up a few sectors. The budget proposed opening up of aviation, media and insurance while easing FDI norms in single brand retail.

"The Government will examine suggestions of further opening up of FDI in aviation, animation, visual effects, gaming and comics industry and insurance sectors in consultation with all stakeholders," the budget document said.

Further, 100 per cent Foreign Direct Investment (FDI) will be permitted for insurance intermediaries. Currently, 49 per cent FDI is allowed in the segment. There is a huge gap between the technology used by the insurers and the surveyors. Entry of foreign players will also bring in the latest technology and advanced digital platform used by surveyors worldwide, said Govinder Kapoor, Chairman, Proclaim Insurance Surveyors and Loss Assessors.

"It would give an opportunity for the profession to develop greater intellect to service products that were previously unavailable in the Indian market, thus enhancing the products and services currently available and allowing each domestic firm to leverage international best practices and use them with their local knowledge and expertise,' he said.

The budget also proposed to ease the local sourcing norms in Single Brand Retail. Currently, the FDI policy requires 30 per cent local sourcing preferably from MSMEs, village and cottage industries, artisans and craftsmen. Some of the top consumer electronics brands are finding it difficult to meet this 30 per cent sourcing target.

"There was a lot of reluctance by the existing foreign JV players in the sector to increase FDI beyond 51 per cent to avoid coping with the sourcing norms and also reluctance shown by new foreign brands to enter the sector owing to the sourcing norms.

Tags: foreign direct investments, union budget 2019