Goods procured from SEZs by single brand retailers to qualify for meeting local sourcing norms

New Delhi: Goods procured from units in special economic zones (SEZ) by single brand retailers, owned by foreign companies, would qualify for meeting the mandatory 30% local sourcing norms, the government said in a clarification.The Department for Promotion of Industry and Internal Trade (DPIIT) said goods which are proposed to be sourced by a single brand retailer from SEZ units will have to be manufactured in India.As per the foreign direct investment (FDI) rules, 100% overseas investment is allowed in the sector but sourcing of 30% of the value of goods procured is mandatory from India for such companies having FDI beyond 51%.SEZs, developed as export hubs, are treated as foreign territory in terms of customs laws. Procurement of goods and services from units in these zones are treated as imports.“As regards sourcing of goods from units located in SEZs in India, it may be clarified that 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,” the department said in the clarification.The statement came in the wake of the government having received representations from various business entities seeking clarification whether sourcing of goods from units located in SEZs would qualify as sourcing from India as per the FDI policy.The department stated that compliance with all the conditions enumerated in the FDI policy and as notified under the Foreign Exchange Management Act (FEMA) would continue to be the responsibility of the manufacturing entity.In January 2018, the government allowed 100% FDI in the sector, permitting foreign players in single brand retail trade to set up own shops in India without government approval.74327360 INSURANCE INTERMEDIARIESSeparately, the department on Tuesday notified the government's decision to allow 100% FDI in insurance intermediaries. Intermediary services include insurance brokers, re-insurance brokers, insurance consultants, corporate agents, third-party administrators, surveyors and loss assessors.In a press note, the DPIIT said 100% FDI is allowed in insurance intermediaries under the automatic approval route.The FDI policy earlier allowed 49% foreign investment in the insurance sector, which includes insurance intermediaries.As per the press note, the insurance intermediary that has majority share holding of foreign investors shall undertake measures including incorporation as a limited company under the provisions of the Companies Act 2013 and that at least one from among the chairman of the board of directors or the CEO or principal officer or MD of the company shall be a resident Indian citizen.It also said the intermediary shall take permission of the Insurance Regulatory and Development Authority (Irda) for repatriating dividend and not make payments to the foreign group or promoter or associate entities beyond what is necessary or permitted. https://ift.tt/2TaOiEt

from Economic Times http://bit.ly/2Vrjdza