Easier for Tesla, Apple to open shop in India under new FDI policy

NEW DELHI: The likes of Apple and Tesla will now find it easier to open shop in India. The FDI consolidated policy released by the Narendra Modi government today has relaxed the sourcing norms for FDI in single brand retail, which was a key demand raised by companies like Apple and Tesla.

As per the new FDI policy, the 30% local sourcing norms will not be applicable for up to three years from the opening of the first store for all those selling products having state-of-the-art and cutting technology, and also where local sourcing policy is not possible.

A committee under the chairmanship of the DIPP Secretary, representatives of Niti Aayog, officials from the concerned ministries as well as technical experts will determine if the 30% local sourcing norm can be waived off.

Even last year, the consolidated FDI policy had talked of exempting the 30% local sourcing norms for cutting edge tech products, but it had not said anything about a committee examining such cases. This time round the policy has dovetailed the composition of such committees.

But once again, the FDI policy has not defined "cutting edge" and "state of the art technology" and that according to experts could hinder decision making.

In 2016, Apple had applied for exempting the sourcing norms for its iPhones and iPads. And earlier this year, Tesla founder Elon Musk had personally tweeted it would not be possible to meet the sourcing pre-condition to set up shop in India.