Millennium Post

‘Will hear stakeholder views before deciding on e-commerce retail FDI’

‘We will take a decision after getting inputs. It is necessary to take views of all stakeholders before taking an important decision,’ Sharma said.

The Department of Industrial Policy and Promotion (DIPP) has come out with a discussion paper giving pros and cons of permitting FDI in the sector.

On whether the government will take decision on this before general elections, Sharma said: ‘I cannot comment anything on the timing... we have started a process, let it get completed’.

Listing advantages and disadvantages, the discussion paper has said that FDI in e-commerce on one hand will boost infrastructure development and spur manufacturing facility but it could also lead to large scale job losses.

It would provide ‘more responsive order taking and after-sales service to customers and competitive pricing; increased access to buyers/sellers, allow MSMEs and artisans to reach out to customers far beyond their immediate location, both locally within India and abroad’, the paper has said.

However, it would be against the spirit of FDI policy in multi-brand retail trading (MBRT). The government has last year permitted 51 per cent FDI in MBRT.

It also said that as small time kirana stores remain the largest source of employment in the country, ‘opening of B2C e-commerce on inventory based model is likely to seriously impact these shopkeepers leading to large scale unemployment’. The DIPP has sought public comments on the paper till 30 January.

India's FDI policy restricts e-commerce companies from offering services directly to retail consumers. At present, 100 per cent FDI is allowed in business-to-business (B2B) e-commerce but not in retail trading.
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