SMEs to benefit from retail FDI policy: Govt

The Government said Wednesday that Indian small industries will benefit from the safeguard pertaining to a minimum of 30 percent procurement from them under the FDI policy in retail trading.

"Small manufacturers will benefit from the safeguard pertaining to a minimum of 30% procurement from Indian small industries. This would provide the necessary scales for these entities to expand capacities in manufacturing, thereby creating more employment and also strengthening the manufacturing base of the country," the commerce ministry said.

it added that small industries will also derive the benefits of technology upgradation, which will provide a fillip to productivity and local value-addition, thereby raising the profitability and earnings of the small manufacturer.

"The sourcing condition will also enable the small enterprises to get integrated with global retail chains, thereby enhancing their capacity to export products from India. Small retailers would continue to be able to source high quality produce, at significantly lower prices, from wholesale cash and carry points," it said.

In addition, the policy will also help create employment, the government said.

"The young population joining the workforce will benefit from the creation of employment opportunities, in the entire range of activities from the back end to the front end retail business, as also from the skills imparted to them by the prospective investors" it said.

According to government statistics, India has received total foreign investment of USD 306.88 billion since 2000 and 94% of this amount has been received during last 9 years.