Top officials from US-based IT companies such as Oracle, IBM, HP and Cisco will meet Industry Department officials next week to discuss the Government’s proposal to allow foreign direct investment in e-commerce and share their concerns about local sourcing norms.
“The US IT companies are keen to know more about the proposed FDI policy for e-commerce since it could spin off into big business opportunities for them as both software and hardware suppliers. They are also concerned about local sourcing norms,” an official from the Department of Industrial Policy & Promotion (DIPP) told Business Line .
While India allows 100 per cent FDI in business-to-business e-commerce, foreign investment in business-to-consumer e-commerce is banned.
Nasscom view The DIPP is framing a draft policy to allow FDI in e-retail, allowing business-to-consumer transactions. Senior officials from Nasscom, the representative body for the Indian IT industry, are scheduled to meet DIPP Secretary Saurabh Chandra on Wednesday to discuss the safeguards they want in the proposed FDI policy for e-commerce.
Nasscom has already recommended to the DIPP that there should be mandatory local sourcing norms incorporated in the policy, which would require the foreign investor to source a portion of its supplies locally.
Local sourcing is already a part of India’s FDI policy for multi-brand retail. Foreign retailers are required to source at least 30 per cent of the value of their manufactured/processed products from Indian small and medium industries.
Officials from the US IT companies, who will be in India on December 16 as part of the US India Business Council delegation, will also meet officials in other ministries, such as telecom and finance, apart from DIPP Secretary Chandra.
“The meetings will focus on safety testing, security testing, taxes, privacy, cloud, opening up of e-commerce to FDI, electronics manufacturing, and e-waste,” said another official.