Aiming to bring more Foreign Direct Investment in the Country, Department of Industrial Policy & Promotion (DIPP) is likely to circulate draft cabinet note by the next week proposing foreign investment in retail e-commerce.
“We are still preparing draft note on the same. We may circulate it by the next week but before floating into the cabinet it will go the Commerce Minister Anand Sharma first,” official sources told The Pioneer. “We had huge discussion with all the stake holders,” official sources added. Recently IT-ITeS industry body NASSCOM president Som Mittal has met DIPP Secretary Saurabh Chandra on the issue
At present, 100 per cent Foreign Direct Investment (FDI) is allowed only in business-to-business (B2B) e-commerce and not in retail trading. Global online retailer Amazon.com has sought relaxation in the FDI policy, which restricts such companies from offering services directly to retail consumers.
According to a media report, business-to-consumer e-commerce segment will attract investment in back-end infrastructure of companies in country which in turn will create multiple job opportunities. The Consumer Affairs Ministry too is planning to formulate comprehensive guidelines to deal with e-commerce.
It has suggestions from Finance and IT ministries to carry the plan forward. During the July meeting of the United Nations Conference on Trade and Development (UNCTAD), India had communicated its strong viewpoint supporting regulation of e-commerce to protect interest of global consumers.
Besides Amazon, eBay is already present in India through complex marketplace format. Both are pitching to open the e-commerce sector. While foreign companies cannot directly offer online retailing, there is no FDI restriction in the marketplace format, which is about offering a platform for third parties and consumers to sell and buy products.
The US Government wants India to allow FDI in e-retail so that American companies such as Amazon and eBay can start operations here.