Cornered over the issue of sourcing from

micro and small enterprises (MSEs) under the new FDI policy in retail,

the government today dispelled doubts saying the 30 per cent obligation

before the global players is limited to India.

This is in contrast to the official note issued last week, when

the government allowed 100 per cent FDI in single-brand retail and

51 per cent in multi-brand, which stated that the 30 per cent sourcing

by global retailers "can be done from anywhere in the world and is

not India specific".

"No, no that was misconstrued (in the Cabinet)," Commerce and Industry

Minister Anand Sharma told reporters here, adding 30 per cent of

the sourcing has been made mandatory from Indian MSEs.

He said this provision of procuring from Indian small units will

not violate the WTO obligations.

"We have taken a decision, we did it for solar mission and telecom

sector and we have deliberated upon it, it is important...It will

create jobs, give a fillip to manufacturing of micro and small industry,"

he said.

Small enterprises had raised concerns over the clause of 30 per

cent sourcing from MSEs anywhere in the world saying this may help

Chinese rather than Indians in view of cheaper labour in the neighbouring

country.

"Chinese products are nuisance for us. And after this (the FDI policy)

it will become more difficult for us," President of Federation of

Indian Small and Medium Enterprises (FISME) V K Agarwal has said.