The Centre kicked off consultations on the Foreign Direct Investment (FDI) policy on e-commerce with companies such as Flipkart and eBay on Thursday to debate the pros and cons of allowing foreign investment in online retail and discuss industry concerns related to taxation as well as definitions.

Asked whether there was re-thinking on FDI in multi-brand retail trade as was being interpreted by some following the release of the new consolidated FDI policy by the Industry Department, Commerce and Industry Minister Nirmala Sitharaman told reporters that “nothing had changed”.

The Centre maintained that its stance on FDI in multi-brand retail trade (brick and mortar) remained what the BJP manifesto said. The BJP has favoured FDI in all employment generating sectors except multi-brand retail.

However, the Industry Department’s recent consolidated FDI policy retained the previous UPA Government’s decision to allow 51 per cent foreign investment in the sector.

Finance Minister Arun Jaitley, in a separate meet, reiterated the party position on FDI in multi-brand retail. “…as far as I have told you that political stance of the party in power is concerned, every body knows we were not in favour. Now the question is what do you do with the past and that is the only question that remained and that debate is not a secret debate,” Jaitley said.

Following the stakeholders consultations on e-commerce, Sitharaman said the government is yet to take a stand on allowing FDI in e-retail. “We have heard everybody. Positions on whether they need FDI or do not need FDI and whether it will affect level playing field have been explained. However, we need many more meetings,” she told reporters.

At present, India allows 100 per cent FDI in business-to-business or B2B e-commerce, but not in business-to-consumer or B2C companies that sell directly to consumers.

The stakeholder meeting on e-commerce was attended by representatives from industry bodies CII, FICCI, Nasscom and companies such as eBay, Snapdeal, Decathlon, H&M and Ikea.

The Minister said that some operators had problems with state governments on issues such as taxation or how e-commerce is defined and perceived.

“I may have meetings with state governments also to understand on what basis they have taken certain positions,” Sitharaman said.

“While CII is favourably inclined towards 100 per cent FDI in B2C route, the sector should be given some time to come to a level where it can compete globally,” the industry body said.

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