Foreign consumer brands such as Puma, Benetton, Canon and Dell amongst several others manufacturing or planning to manufacture in India have lots to cheer about now.

The Narendra Modi Government’s maiden Budget has allowed companies with manufacturing units in the country to sell their products online without taking any additional approval on foreign direct investment.

These companies have been keen on selling through the online platform sensing the potential of the burgeoning $3.2-billion e-tailing market. However, most of these companies have been importing products. Even those with some manufacturing facilities were not selling directly and were doing it through their authorised dealers as the rules were unclear. Arvind Mayaram, Finance Secretary, said the announcement was in the form of a clarification. “There was confusion … if a company is investing in manufacturing in India, then can it sell manufactured goods through e-commerce or not. That has been clarified. Those companies that are manufacturing in India are permitted to sell their products through the e-commerce platform,” Mayaram said, adding that this has no link to the larger question of allowing FDI in e-commerce. So, companies such as Walmart or Amazon have no respite yet.

But retailers said the move could give a major push to the manufacturing sector, and encourage foreign companies to set up manufacturing facilities in India.

While Sandeep Ladda, India Technology leader at PwC said the position of players who are purely in the e-tailing space remains status-quo, Sandip Shah, Managing Director, ShopYourWorld, said that allowing foreign manufacturers to sell online directly was a great move.

“We hope that more research goes into the understanding of the e-commerce sector, as it is clearly the way of the future. A planned approach needs to be made to help channelise and refine it, and it is hoped that the Modi Government invests considerable time, money and energy in its expansion,” he added.

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