E-comm players seek stable FDI rules, policy to check violation

Meenakshi Verma Ambwani and Amiti Sen New Delhi | Updated on March 25, 2021

The meeting was attended by a number of major e-comm firms   -  istock/William_Potter

DPIIT gives firms a week’s time to submit inputs

The Department for Promotion of Industry and Internal Trade (DPIIT) has given e-commerce companies operating in India a week to give their inputs on foreign direct investment (FDI) rules for the sector for consideration during future policymaking.

A large section of e-commerce companies participating in the DPIIT meeting on FDI rules on Thursday urged the government for a stable and predictable policy regime but some raised concerns about policy violations, industry sources told BusinessLine.

Tightening ‘loopholes’

The meeting was attended by a number of major e-commerce companies including Flipkart, Amazon, Reliance, Snapdeal, Swiggy, Zomato, Makemytrip, Nykaa, Bigbasket, Uber, Tata Cliq, Ola, Netmeds, Shopclues, Grofers, Urban Ladder and Udaan.

Many e-commerce players at the meeting said that the policymakers must take a long term view to create an enabling environment for the growth of the e-commerce industry.

However, some players raised concerns about FDI violations and felt that changes were needed in the existing policy framework for stricter enforcement, sources added. This indicates a lack of uniform opinion among industry stakeholders.DPIIT’s meeting with e-commerce companies was one in a series of stakeholder consultations it has been holding on the existing FDI policy for e-commerce and its possible tightening to close “loopholes”.

This follows complaints from certain sections of the industry including traders’ body CAIT, the DPIIT on alleged flouting of FDI rules by major players such as Amazon and Flipkart who are allowed to operate only as a market place and not sell their own products through their online platforms.

CAIT, which participated in the first stakeholder meeting that DPIIT held with retailers and traders on March 17, held that companies and affiliates of foreign marketplace entities should not be allowed to sell their products on the marketplace platform, directly or indirectly, owned and/or controlled by the marketplace entity.

Published on March 25, 2021

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