Goverment's stance on e-commerce FDI policy unchanged

The story: Indian retail market is huge, and substantial part of it is unorganised. The online e-commerce - e-tail - has done reasonably well in past

Goverment's stance on e-commerce FDI policy unchanged

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• The story: Indian retail market is huge, and substantial part of it is unorganised. The online e-commerce - e-tail - has done reasonably well in past few years. Major global players operate in the Indian market now, but policy friction is now rising.
• Government's latest stance: Minister Piyush Goyal said the government was about to release the long pending ecommerce policy and clarifications to the existing FDI policy for ecommerce sector, after the draft consumer protection rules for e-commerce are finalized.

1. The government will not change the current policy of foreign direct investment in the e-commerce sector as it has been “crystal clear” since it was announced
2. The government has noted instances where the policy is not being followed in letter and spirit. That aspect will soon be addressed.

• Upset with US: Recently, the Minister had criticised US-based companies for “very blatantly” flouting India’s laws and being “arrogant.”
• Cosumer protection: It was clarified that as regards the final e-commerce policy, the revised rules were given under the consumer protection act. This is a series which involves consumer affairs, FDI policy and e-commerce policy. The government felt it sent a “very strong” message to the world as there used to be criticism that India’s e-commerce policy is skewed against foreign investors. By announcing the e-commerce policy for consumer protection, the govt. demonstrated that its first and foremost concern is the consumer.
• Summary: A serious bone of contention in the FDI rules is that owners of marketplaces cannot hold inventory on their own marketplace. That would make the business model of most e-comm giants difficult to run.

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