Source : Procurement Leaders

Adidas has expressed concern that Indian regulations requiring foreign companies operating single brand stores in the country to source 30% of goods locally are overly restrictive.

The sportswear company said the requirements would be problematic for it, as well as its sister company Reebok.

“The clause of 30% mandatory sourcing from small and medium enterprises is a concern. We are studying the policy changes in detail, but the sourcing part is something that is difficult for us to follow,” Adidas India managing director Subhinder Singh Prem told The Press Trust of India PTI.

Prem added that both Adidas and Reebok currently sourcing a major percentage of their goods locally in India.

“We are integrating our systems and are rather moving on to large manufacturers. So when we are doing that, it will become even more difficult for us to follow the sourcing clause,” he told the PTI news agency.

The comments come after, earlier this year India relaxed restrictions to allow foreign direct investment in single brand retail operations. However, this concession came with the requirement that 30% of the products must be sourced locally.

“We will take a couple of months to fully understand the government’s decision on FDI,” Prem added in the report.

The same article quoted IKEA as saying that the conditions in respect to local sourcing might also be difficult for the company.