Xiaomi is now willing to follow the 30% local sourcing rule: Report

Opening up single brand retail stores to capture the Indian smartphone market has been a priority for a number of companies of late. However, there is a 30% domestic sourcing norm that is preventing these companies from opening up their stores in India. Apple, LeEco and Xiaomi had all applied for relaxation of the 30 percent local sourcing norm with the Foreign Investment Promotion Board. Now, according to a report in the Economic Times, Xiaomi has withdrawn the request it had earlier made for an exemption from the 30% local sourcing norm.Xiaomi had sought complete exemption from the mandatory sourcing in just April this year. One of the provisions that allows for the exemption of the sourcing rule, is the introduction of new and cutting edge technologies in the market.Xiaomi withdrawing its request for exemption signifies that the Xiaomi is willing to comply with the government regulations for local sourcing. 30 percent of the value of the device will have to be sourced from local small, medium and large scale industries. Xiaomi just showed its willingness to comply with the government's norms. This means that Xiaomi will be in perfect position to open up its single brand retail stores in India. This could give it a significant advantage over other companies that are not willing to work with the governmental norms of local sourcing, including LeEco and Apple.