FDI in Online Retail: Sitharaman discusses issues

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SME Times News Bureau | 11 Jul, 2015
With retail store operators going to court seeking parity between online and offline retailers, Commerce Minister Nirmala Sitharaman met industry representatives from both e-commerce and retail companies on Friday to discuss opening up the e-commerce sector to foreign direct investment (FDI).

A source in the department of industrial policy and promotions told agency in New Delhi that DIPP Secretary Amitabh Kant told company representatives at the meeting that the sensitive issue of opening the retail sector to foriegn investment required detailed consultations with all stakeholders and that the union commerce minister is slated to meet with ministers concerned from the various states next Wednesday.

Significantly, Sitharaman and DIPP officials met bankers on the matter on Friday, prior to their meeting with the e-commerce and retail companies.

Almost all stakeholders, including representatives of the Confederation of All India Traders (CAIT) and the Federation of Indian Chambers of Commerce and Industry had been invited to Friday's meeting.

"In the meeting, CAIT urged the government not to turn the Indian retail market into an e-commerce dumping yard by allowing FDI in e-commerce," said CAIT secretary general Praveen Khandelwal.

Noting Indian retail trade is a source of livelihood for tens of millions people in the country, Khandelwal said that "though 100 percent FDI is allowed in retail in B2B model, the e-retailers are openly circumventing the norms and indulging in B2C model which is creating an uneven playing field."

India currently allows 100 percent FDI in business-to-business (B2B) e-commerce, but not in B2C companies selling directly to consumers.

The Retailers Association of India (RAI) moved the Delhi High Court in May seeking a level playing field between online and offline retailers. The association, representing large brick-and-mortar retail companies, had boycotted the consultations with the minister on the matter in May.