The government refrains from allowing FDI in the B2C segment of e-commerce industry since the government is focusing on strengthening the manufacturing sector.
The argument over relaxing FDI has been put on hold by the Modi government and the plans are in full steam to uplift the manufacturing sector, says a report. Manufacturing sector would go on to become instrumental in delivering the 12 million jobs which country needs every year to nurture growth and employment issues, the report said.
The ministry of commerce and industry is opposed to allowing FDI in the B2C segment of e-commerce at the moment, since the intention is to manage resources to uplift the manufacturing sector by creating physical infrastructure, as per the inputs given by a DIPP official to the Financial Express.
This is because B2C FDI in e-commerce could put it at odds with FDI policy in multi-brand retail sector. The opposite however is true for allowing FDI in B2B segment in the same industry since it boosts manufacturing activities. The small and medium retailers get a platform to sell their products through market place model in this way, says the report.
The extant policy, introduced by UPA-II, allows 51 per cent FDI in the sector, still the government feels opening multi-brand retail sector wold jeopardize the interests of small retailers and traders. This has made Carrefour and other multi-brand retailers pull away from committing any investments in India, the report mentions.
“Currently, we need large number of physical infrastructure, not virtual infrastructure. E-commerce will not promote the physical infrastructure. Right now, our focus is on zero-defect zero-effect products,” the official said in the report.
The government reportedly estimates the e-commerce sector to touch a sales figure of Rs 50,400 crore by 2015-16 leaving aside tickets and online sales. E-commerce giants both domestic and multinational wish wish the B2C segment to open, the report states.
The ministry of consumer affairs has suggested to bring the sector under the supervision of nine government agencies and regulatory bodies, including RBI, home ministry, the revenue department and the ministry of corporate affairs, stated the report.
The ministry of commerce and industry is opposed to allowing FDI in the B2C segment of e-commerce at the moment, since the intention is to manage resources to uplift the manufacturing sector by creating physical infrastructure, as per the inputs given by a DIPP official to the Financial Express.
This is because B2C FDI in e-commerce could put it at odds with FDI policy in multi-brand retail sector. The opposite however is true for allowing FDI in B2B segment in the same industry since it boosts manufacturing activities. The small and medium retailers get a platform to sell their products through market place model in this way, says the report.
The extant policy, introduced by UPA-II, allows 51 per cent FDI in the sector, still the government feels opening multi-brand retail sector wold jeopardize the interests of small retailers and traders. This has made Carrefour and other multi-brand retailers pull away from committing any investments in India, the report mentions.
“Currently, we need large number of physical infrastructure, not virtual infrastructure. E-commerce will not promote the physical infrastructure. Right now, our focus is on zero-defect zero-effect products,” the official said in the report.
The government reportedly estimates the e-commerce sector to touch a sales figure of Rs 50,400 crore by 2015-16 leaving aside tickets and online sales. E-commerce giants both domestic and multinational wish wish the B2C segment to open, the report states.
The ministry of consumer affairs has suggested to bring the sector under the supervision of nine government agencies and regulatory bodies, including RBI, home ministry, the revenue department and the ministry of corporate affairs, stated the report.
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