Comments
With global retailers such as Walmart and Carrefour ignoring India despite the watering down of the Foreign Direct Investment (FDI) policy in multi-brand retail, the Industry Department has decided to be more careful while framing rules for foreign investments in e-commerce and involve stakeholders across the board.
The Department of Industrial Policy & Promotion (DIPP) is likely to put up a discussion paper on the proposed policy for FDI in e-commerce on its Web site soon to get the views of all concerned, a DIPP official told Business Line .
The Government is seeking to open up the e-commerce sector to foreign investments, but is yet to make up its mind on the areas to include and the safeguards to put in place to protect domestic investors. India allows 100 per cent FDI in business-to-business e-commerce while business-to-consumer e-retailing is banned.
“While preparing the discussion paper we have realised that e-commerce is a vast area and there are several facets that could either be incorporated in the policy or left out. We want to benefit from the opinion of all stakeholders,” the official said.
One big question that the policy makers are grappling with is whether to restrict FDI in e-commerce to goods or also include services in its ambit. If a decision is taken on opening up e-commerce in services as well, it would mean that trading in financial products such as shares and insurance, too, would get covered.
The DIPP already has had discussions with global e-commerce companies such as Amazon and e-Bay and domestic ones such as Flipkart that have conflicting interests.
“Some global companies that are already operating in India by putting in place arrangements with local companies may not be too keen for FDI to be allowed,” the official said.
On the other hand, companies such as US-based Amazon have been pushing the Indian Government to open up the sector so that it can bring in investments.
Small local e-commerce companies, too, have differing views on the issue.
IT industry body Nasscom, in a submission to the DIPP, has outlined sourcing conditions that the Government may weave into the policy.
Interestingly, Walmart has not yet invested in India as it is unhappy with the condition of local sourcing of inputs. Although the Government has made the FDI policy in retail less stringent after discussions with the company, the US-retailer is not quite satisfied.
“We want a wide-ranging discussion on all components of the policy. We look forward to hearing from all stakeholders,” the official added.
The DIPP will finalise the Cabinet paper on e-commerce based on the feed-back it gets.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.