With an aim to enhance foreign investment into the country, the Department of Industrial Policy and Promotion (DIPP) has started consultations with stakeholders on allowing foreign direct investment in retail e-commerce before the end of this financial year. Currently, 100 percent FDI is allowed in business-to-business (B2B) e-commerce, while business-to-consumer (B2C) is still prohibited.
The DIPP has prepared the discussion paper under the commerce and industry ministry for feedback. After receiving feedback, the cabinet note will be circulated to all ministries for an inter-ministerial discussion. The draft also deals with the issues concerning mandatory sourcing norms, which has been sharply criticised by global retailers. At present, there is a mandatory 30 percent local sourcing norms for foreign players.
The DIPP is considering whether to allow FDI in e-commerce only in goods or to include services as well. Including FDI in e-commerce in services would have larger implications as the ambit is huge. In India, online services such as net-banking, payment of taxes, ticketing and bill payment, matrimonial sites are developing at a brisk pace. On goods selling front, flipkart, jabong and firstcry are major players selling a large variety of goods through online. Furthermore, DIPP is facing another problem as foreign players have already tied up with domestic companies; therefore these players are opposing the government’s decision to allow FDI at this juncture.
The DIPP has prepared the discussion paper under the commerce and industry ministry for feedback. After receiving feedback, the cabinet note will be circulated to all ministries for an inter-ministerial discussion. The draft also deals with the issues concerning mandatory sourcing norms, which has been sharply criticised by global retailers. At present, there is a mandatory 30 percent local sourcing norms for foreign players.
The DIPP is considering whether to allow FDI in e-commerce only in goods or to include services as well. Including FDI in e-commerce in services would have larger implications as the ambit is huge. In India, online services such as net-banking, payment of taxes, ticketing and bill payment, matrimonial sites are developing at a brisk pace. On goods selling front, flipkart, jabong and firstcry are major players selling a large variety of goods through online. Furthermore, DIPP is facing another problem as foreign players have already tied up with domestic companies; therefore these players are opposing the government’s decision to allow FDI at this juncture.
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