Xiaomi withdraws request for exemption to 30% local sourcing rule

New Delhi: Xiaomi's application for single brand retail still remains with the government but it has removed its request to seek exemption from the rule requiring 30% local sourcing, people aware of the changes said.

The Chinese smartphone maker is learnt to have removed the specific demand since its local manufacturing will include sourcing as per the government norms.

The company declined to comment.

Xiaomi's move comes close on the heels of Apple’s application for seeking waiver from local sourcing was turned down by the finance ministry earlier this month. This was after the iPhone maker was granted an approval from the department of industrial policy and promotion ( DIPP). The final word on Apple's application isn't yet out.

Apple had sought the waiver as per foreign direct investment (FDI) norms, under which the government may relax the sourcing condition for entities undertaking single-brand retailing if they have “cutting-edge” technology and where local sourcing is not feasible.

Companies following the local sourcing norms across sectors would have to procure 30% of the value of goods from small, medium scale enterprises, village and even cottage industries.

Another Chinese smartphone maker LeEco has also sought waiver from this norm in its application.