Govt ‘examining proposal’ to allow FDI in inventory-based e-comm for exports only

Doha: A proposal to allow FDI in an inventory-based model of e-commerce only for export purposes is under examination as it will help increase India’s outbound shipments without impacting the businesses of small retailers, Commerce and Industry Minister Piyush Goyal said.

At present, the country’s FDI policy does not permit foreign direct investment (FDI) in the inventory-based model of e-commerce. It is allowed only in firms that are operating through a marketplace model.

“I liked that proposal, the department is examining it,” Goyal said.

The minister said that if such e-commerce firms want to keep inventory for exports, then “I think we have no objection to that”.

When asked if the ministry will tweak the policy for that, he said: “We may need to issue a clarification” in this regard.

The proposal was mooted by the Directorate General of Foreign Trade (DGFT) and is being examined by the Department for Promotion of Industry and Internal Trade (DPIIT).

E-commerce stakeholders, too, have asked for a relook at the FDI policy on this issue.

The proposal is important as the government is looking at ways to boost exports through the e-commerce medium. It is working on measures such as setting up e-commerce export hubs. As per estimates, the country’s e-commerce exports currently stand at USD 2 billion as compared to China’s staggering USD 350 billion.

The global e-commerce trade is about USD 800 billion, and it is estimated to reach USD 2 trillion by 2030.