Economy

Simplify FDI norms to fuel e-commerce growth: ISB report

Our Bureau Hyderabad | Updated on November 25, 2021

The search algorithm used by e-commerce companies is a black box iStock grinvalds

‘Equip small retailers with digital technologies’

The Indian School of Business (ISB) has felt that the current policies around foreign funding backed e-commerce players would make it restrictive for new players to enter.

The Bharti Institute of Public Policy (BIPP) at the ISB called for the simplifications of the FDI norms in India's e-commerce sector. It would require some broad rules for conducting e-commerce business in the country.

“They should be allowed to take care of minute details to the business entities and market dynamics,” it said.

The report wanted the Government to see the entire retail sector and its various business models through the same lens and recommend similar rules on all companies operating in the sector.

“Irrespective of their mode of transaction -- online or offline, they should be treated alike,” it said.

Commissioned by policy think-tank Empower India, the report analyses the scope and challenges of e-commerce industry in the country and recommended significant policy changes for the sector’s growth and development.

“Simplification of norms for conducting business in the retail and e-commerce sector should be formed by a single ministry in consultation with other related government and non-government bodies,” the report suggested.

The business norms should also be articulated timely and clearly to avoid interpretation challenges to foreign entities.

“A customer-centric e-commerce domain requires FDI for growth; capacity building for small retailers to ensure their smooth online transition, and alternative platforms to be adopted by the government for a sustainable and comprehensive e-commerce growth,” Avik Sarkar, Associate Professor, Bharti Institute of Public Policy, and lead author of the report, said.

‘Policies stringent’

The report said that several policies related to the retail sector in the country are made stringent in the expectation that small retailers and sellers cannot cope with the dynamic technological changes.

“There is a need to strengthen the small retailers through capacity building programmes,” the report said.

“We should equip them with digital technologies to facilitate their store operations, distributor management, and product marketing along with onboarding an e-commerce platform,” it pointed out.

Published on November 25, 2021

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