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FDI in e-commerce: Ministry seeks feedback to sort it out

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New Delhi: Amid wide differences between various players over FDI in India’s fast growing e-commerce sector, the Commerce and Industry Ministry today held wide ranging discussions with different stakeholders on how to chart future course.

Department of Industrial Policy and Promotion (DIPP) Secretary Amitabh Kant held three meetings during the day to take views of various stakeholders on several issues facing the e-commerce sector.

According to sources, Kant first met officials of various public sector banks on issues over payment mechanism of e-commerce. In another meeting, he met representatives of commerce, finance, corporate affairs and consumer affairs ministries to take their views on the matter.


Kant also met representatives of retail companies and industry associations to seek their feedback on the matter, a source said. These included representatives from both domestic and foreign retailers and e-commerce companies such Amazon, Future Retail, Flipkart, Walmart, H&M, Snapdeal, attended the meeting.

It is understood that the Commerce and Industry Ministry has called a meeting between Nirmala Sitharaman and representative ministers from various states on July 15 for further discussions on the subject.

Retailers Association of India (RAI), which had dragged the government to courts over the selective FDI in the sector, said the issue is not of brick and mortar versus e-commerce. It is about who is allowed to bring in funds and who isn’t.

“We have asked the government to define retail. There should not be two policies, one for e-commerce and one for retail,” RAI chief executive Kumar Rajagopal, who attended the meeting, told PTI.

Making his point, Rajagopal said: “Fact of the case is somebody who claims to be a retailer does not get funds. Why is Amazon, a global retailer, calls itself a marketplace here and not a retailer?”

Agreeing with him, Future Retail Joint Managing Director Rakesh Biyani said: “There is a need to define comprehensive policy on retail. We expect government to simplify rules in what constitutes retail. Government has to decide on permitting FDI in all forms of retail trade.”

Industry body CII chairman Viresh Oberoi, however, said: “What is required is to spread awareness and benefits (of e-commerce) rather than bring in regulations to control.” He further said: “Our stand is technology is here to stay. Let’s see how we can take advantage of technology to bring about further improvement in terms of customer satisfaction, customer reach and help smaller companies.”

CAIT National Secretary General Praveen Khandelwal said if FDI in e-commerce is allowed, “it will facilitate mass scale dumping of products from over the globe to India”. He said DIPP Secretary had assured the stakeholders that a final decision would be taken only after debate and discussion as it was a contentious issue. Currently, the government allows 100 per cent FDI in business to business e-commerce and not to business to consumers.