Tirupur: The relaxation given on local sourcing of goods for single-brand retail shops of multinational companies to attract more foreign direct investment has evoked mixed responses among the apparel industrialists.

As per the earlier rule, single-brand retailers with more than 51% share owned by MNCs were ought to purchase 30% goods from local manufacturing companies, yearly.

“Now, the retailers are given a grace period of five years. For the first three years, they need not purchase anything from local manufacturers. And in the fourth year, they could start purchasing and they should complete it in the fifth year,” said Raja M Shanmugham, president, Tirupur Exporters’ Association.

He said the move would work against the welfare of the local manufacturers. “Within the first three years, the MNC retailers could have made the full use of the relaxation. And once they establish themselves, it could not be expected that their presence would benefit the local manufacturers.”

A hosiery unit owner, who did not want to be named, said, “The government’s move is unfair to the manufacturers like us. We feel such moves are against the concept of Make in India.”

However, Sanjay K Jain, chairman, Confederation of Indian Textile Industry, welcomed the move and said it would help the local manufacturers to expand their market. “The MNCs would not compromise on quality and if a local manufacturer is ready to give the quality desired by them, they would purchase them. Now, the international textile brands are sourcing the goods from the countries such as China and Bangladesh. If the local manufacturers are able to build relationship with the same brands, they could expand their markets.”

Published On : 10-09-2019

Source : Times of India