Govt-industry subgroup mulls over allowing FDI in B2C e-commerce

A new e-commerce policy is under discussion and a government-industry subgroup is mulling over various rules to implement in the e-commerce industry. Of various suggestions, one- of the prominent recommendation by the subgroup has come in the form of allowing foreign investment in inventory-led online retailers stocking products ‘made in India.’

The subgroup has representatives from industry bodies and e-commerce companies, and officials from the ministry of corporate affairs, ministry of electronics and information technology, Department of Industrial Policy and Promotion and Competition Commission of India.

It has, however, suggested this for business-to-consumer e-commerce models with Indian entrepreneurship and control.

The new policy may also redefine ecommerce in the country with transferring greater liability and responsibility on them. They may have to seek government accreditation and integrate with National Consumer Helpline to address consumer issues. A group of nine secretaries led by commerce secretary Rita Teaotia will meet on today to discuss these issues.

The Press Note 3 of 2016, which laid down several FDI rules for the ecommerce sector, was also discussed widely at the meeting and people were in favour of maintaining Press Note 3.

The All India Online Vendors Association issued a dissenting statement following reports that the government may allow FDI in inventory-led ecommerce. They said that that instead of investigating existing violations, the government is thinking about relaxing norms for big ecommerce

Ever since the announcement of Flipkart acquisition by Walmart, associations who represent traders, sellers as well as political lobby group have been opposing the deal.

According to traders body Confederation of All India Traders (CAIT), it has been approaching the government to bring reforms in e-commerce from last five years but the slow response led to encouragement of this deal which can cause a threat to the e-commerce industry.

They are alleging the deal will increase malpractices manifold in the spectrum of e-commerce by manipulating and controlling the retail sector including several other aspects of online commerce.

The development was first reported by ET.