No plans to introduce FDI in e-commerce retail: Sitharaman

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SME Times News Bureau | 23 Jul, 2015
The government has made it clear that it has no plans to bring in foreign direct investment (FDI) in e-commerce retail, parliament was informed on Wednesday.

"No such proposal is under the consideration of the government," Commerce and Industry Minister Nirmala Sitharaman said in a written reply in the Rajya Sabha on whether the government plans to introduce FDI in e-commerce retail.

"The term 'e-commerce retail' has not been defined in the extant FDI policy. However, as per the extant FDI policy, e-commerce activities refer to the activity of buying and selling by a company through the e-commerce platform," she added.

Ealier this month, Sitharaman met with industry and states' representatives on opening up the e-commerce sector to FDI.

It was agreed then that the states would give their views on the matter within 15 days.

"The government of India invited states to discuss the issue of FDI in e-commerce in B2B and B2C and also bringing in the FDI in multi-brand retail," Haryana Finance Minister Captain Abhimanyu told reporters after the meeting.

"But one consensus between the states and the Centre was that whatever decision is taken, it must be taken after good deliberation and after engagement with stakeholders at the state level and after assuring ourselves that the interests of the consumers, small retailers as well as Small and Medium-sized Enterprises sector are protected," he said.

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

Describing India as an "e-commerce dumping ground", the Confederation of All India Traders (CAIT), in a letter to the chief ministers, has said that "the Indian government has an anti-dumping policy with a clear mandate to protect domestic trade and industry from such unfair trade practices".

Dumping occurs when prices are artificially lowered by accessing funds from overseas sources, government or otherwise.

"Under the umbrella of e-commerce business in India, the e-retailers are selling products much below the actual price of the manufacturer. This is possible only because of funding received from overseas and is nothing but e-commerce dumping," the traders' association said.

Jammu and Kashmir Industries Minister Chander Prakash told reporters after last week's meeting: "We have to be careful while introducing FDI in e-commerce".

Some states, including Tamil Nadu, are opposed to FDI in retail and e-commerce.

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

The Retailers Association of India, representing large brick-and-mortar retail companies, moved the Delhi High Court in May seeking a level playing field between online and offline retailers.