NEW DELHI: The Foreign Investment Promotion Board FIPB ) has written to the Department of Industrial Policy and Promotion ( DIPP ), asking it to incorporate relaxation in local sourcing rules for foreign-funded single-brand retailers selling products with cutting-edge technology.In its letter to DIPP, which has been lobbying for clearance for Apple Inc to set up its stores here, the board that vets foreign investment proposals said the single-brand retail policy could be tweaked to give high-tech companies a time frame within which they need to meet the sourcing condition.“Any relaxation in the time frame for sourcing has to be part of the FDI policy framework and cannot be on a case-to-case basis,” said a government official. “The FIPB will be able to grant any relaxation only then.”Also, a decision on the sourcing rule cannot be made with respect to one company and an enabling policy framework must help in dealing with such proposals in future, the official added.The policy on foreign investment in single-brand retail makes it compulsory for the Indian operations with 51% or more foreign direct investment to source at least 30% of the value of products sold or raw materials from local suppliers — preferably micro, small and medium enterprises, village and cottage industries, artisans, and craftsmen.Apple, which had sought approval to set up shop in India, raised difficulty in meeting this requirement because of the advanced technology involved in its products. DIPP supported the proposal, seeking relaxation under a clause that covers investors bringing cutting-edge technology.The FIPB cleared Apple’s proposal to set up its 100%-owned iconic stores, but did not give them exemption from the 30% sourcing clause. What went against the proposal was the absence of a definition for ‘cutting edge’ in the policy.The inter-ministerial FIPB wants DIPP to put in place an appropriate policy framework to determine cuttingedge technology and the time that can be given to the investor to meet the 30% local sourcing rule.Policymakers within the government are in favour of continuing with condition of local sourcing for the retail sector. The government has identified revival of manufacturing in the country as its key focus area to boost job creation. “This is an old condition which is continuing.There is a rationale to this condition,” Finance Minister Arun Jaitley said in a recent interview to ET. “When you offer such a large market to a foreign supplier, it’s only fair that you expect him to create some jobs in India. Otherwise we will become a complete nation of traders only.”India allows 100% FDI in single-brand retail since January 2012.The policy was revised in November 2015, allowing companies that bring cutting-edge and state-of-the-art technology to open single-brand outlets without carrying out 30% local sourcing, subject to government approval. The policy didn’t define cutting edge.Instead, the DIPP formed a three-member panel, comprising its secretary, a member of the Niti Aayog and a representative of the administrative ministry such as telecom and information technology, to look at the applications made under this category and determine if they fit the bill.Besides Apple, a number of other companies including China’s handset makers Xiaomi and LeEco have sought waiver from sourcing under the new policy.The FIPB felt exemption would not be given to Apple in the absence of explicit guidelines on interpretation of the ‘cutting-edge’ definition, reasoning it would introduce discretion, something the NDA government wanted to avoid in its economic policies. At present, Apple sells its products in India through a network of franchisee-owned stores.